10.04-PR012 An investment of $1,500,000 is made in assets for manufacturing precision glass products. The equipment qualifies as 7-year property for MACRS-GDS depreciation. Measured in constant dollars, the investment yields annual returns of $350,000 plus a salvage value of $600,000 at the end of a 5-year planning horizon. Investment capital is obtained by borrowing $1,200,000 at an annual compound rate of 18% and the loan is repaid over a 5-year period. A 25% tax rate and 3% inflation rate apply. The real ATMARR is 7%. Among the four loan payment plans considered in the chapter, use the one that maximizes the ATPW for the borrower. Determine (1) the after-tax real present worth, (2) the after-tax actual present worth, (3) the after-tax real internal rate of return, and (4) the after-tax actual rate of return for the investment. a. Use the Section 179 expense deduction and regular MACRS-GDS depreciation. b. Use 50% bonus depreciation. c. Use both the Section 179 expense deduction and 50% bonus depreciation. 10.04-PR012 An investment of $1,500,000 is made in assets for manufacturing precision glass products. The equipment qualifies as 7-year property for MACRS-GDS depreciation. Measured in constant dollars, the investment yields annual returns of $350,000 plus a salvage value of $600,000 at the end of a 5-year planning horizon. Investment capital is obtained by borrowing $1,200,000 at an annual compound rate of 18% and the loan is repaid over a 5-year period. A 25% tax rate and 3% inflation rate apply. The real ATMARR is 7%. Among the four loan payment plans considered in the chapter, use the one that maximizes the ATPW for the borrower. Determine (1) the after-tax real present worth, (2) the after-tax actual present worth, (3) the after-tax real internal rate of return, and (4) the after-tax actual rate of return for the investment. a. Use the Section 179 expense deduction and regular MACRS-GDS depreciation. b. Use 50% bonus depreciation. c. Use both the Section 179 expense deduction and 50% bonus depreciation