5 d Out of question Analyze the cost of purchasing an item of construction equipment under the conditions described. A) Planned equipment use per hour? B) Depreciation for each year? C) Investment credit? D) Interest for Loan Amortization? E) Evaluate total net after-tax cash flow and its present value. Company's marginal tax rate Company's after-tax rate of return Planned equipment use Equipment cost %49 %7 6 days a week and 12 hours per day Purchase assumptions Estimated resale value after 5 years Cost recovery method = 5-years Investment credit Cost basis Down payment Loan Period Loan interest rate Monthly payment Loan amortization Interest: Year 1; $47,828.64 (payment) Year 2: $47.828.64 (payment) Year 3: $47,828.64 (payment) Present worth factors for i = %8.3: Initial = 1.00000 Year 1; ? $125,000 $22,000 Yearly depreciation by sum of the year digits %7.5 of Book Value of the last year Equipment cost less half of investment credit %35 of equipment cost 36 month 9612 $3,985.72 $33,498.73 (To Principal) $38,018.03 (To Principal) $43,969.16 (To Principal) Year 2: ? Year 3: ? Year 4: ? Year 5