A big investment of $420,000 in a computer produces before-tax net revenue of $170,000/yr for 10 years, at which time the computer will have a salvage value of $18,000. We assume $320,000 is borrowed at 16 % annual compound interest and repaid in 10 years. We will use a 10-year planning horizon, a 40% tax rate, 11% BTMARR, and SLN depreciation.

Determine (i) ATMARR, and then the preferred payment plan based on ATPW and determine the ATFW, ATAW, ATIRR, and ATERR for each of the following four plans:

e) Plan 1: Pay interest each period, but make no principal payment until the end of the loan period

f) Plan 2: Make equal end-of-period principal payments and pay interest each period on the unpaid balance at the beginning of the period

g) Plan 3: Make equal end-of-period payments over the loan period

h) Plan 4: Make no payment until the end of the loan period