Fin 505 Week 5 Assignment

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FI516 Week 5 Assignment Life of equipment: 4 Loan amount = equipment cost: $40,000 Interest rate: 10.0% Lease Pmt: $10,000 Tax rate: 40% Maintenance Costs: $1,000 Salvage Value $10,000 Loan amortization for cash payment and interest expense: N = 4 I/Yr = 10 PV = 40,000 FV = 0 Pymt = -12,618.83 1 40,000 12,619 4,000 8,619 31,381 2 31,381 12,619 3,138 9,481 21,900 3 21,900 12,619 2,190 10,429 11,472 4 11,472 12,619 1,147 11,472 0 Loan Analysis: 1 2 3 4 MACRS factor 0.33 0.45 0.15 0.07 Depreciation 13,200 18,000 6,000 2,800

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