Info

116,719 49,210 -47,761

Net Present Value at 18%:

Net Present Value at 18%:

116,719 49,210 -47,761

$757,121

Notes: Loan Amount: 2,500,000 (used to purchase equipment at year 0)

Loan Finance Rate: 15% MARR 18%

Tax Rate 34%

MACRS Depreciation for 7-Year Property, with half-year convention at EOY 5 Accounting Book Value at end of year 5: 669,375

Estimated Market Value at end of year 5: 1,200,000

EOY 5* illustrates the Equipment Sale and Book Value

Taxable Income: =(Market Value - Book Value)

Table 25.5 Economic Analysis for a Loan with a 20% Down-Payment,

EOY Savings Depr. Payments Principal Taxable Tax ATCF

Principal Interest Total Outstanding Income

0 0

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