Analyze the cost of renting, leasing, and purchasing an item of construction equipment under the conditions described. Evaluate total net after-tax cash flow and its present value. %42 Company's marginal tax rate %8.5 Company's after-tax rate of return Planned equipment use 2000/hour/year for 5 years Purchase assumptions Equipment cost $125,000 Estimated resale value after 5 years $52.000 Cost recovery method=5-years Yearly depreciation by sum of the year digits method Investment credit %10 of equipment cost Cost basis Equipment cost less half of investment credit Down payment %25 of equipment cost Loan Period 36 month Loan interest rate %12 Monthly payment $3.985.72 Loan amortization Interest: Year 1: $47.828.64 $12.498.73 Year 2: $47.828.64 $8,018.03 Year 3: $47,828.64 $2.969.16 Lease assumptions Term of lease 5 years Lease payment $3.750 /month Initial payment 6 months in advance Rental assumptions Rental period 5 years Rental rate $5.750 /month Mid-year present worth factors for i - 57: Initial - 1.00000 Year 1: ? Year 2:? Year 3:2 Year 4:? Year 5:2 Finallend of Year 51: ? *Hint: For mid-year present worth factor you should consider the average of start of year and end-of-year values. Analyze the cost of renting, leasing, and purchasing an item of construction equipment under the conditions described. Evaluate total net after-tax cash flow and its present value. %42 Company's marginal tax rate %8.5 Company's after-tax rate of return Planned equipment use 2000/hour/year for 5 years Purchase assumptions Equipment cost $125,000 Estimated resale value after 5 years $52.000 Cost recovery method=5-years Yearly depreciation by sum of the year digits method Investment credit %10 of equipment cost Cost basis Equipment cost less half of investment credit Down payment %25 of equipment cost Loan Period 36 month Loan interest rate %12 Monthly payment $3.985.72 Loan amortization Interest: Year 1: $47.828.64 $12.498.73 Year 2: $47.828.64 $8,018.03 Year 3: $47,828.64 $2.969.16 Lease assumptions Term of lease 5 years Lease payment $3.750 /month Initial payment 6 months in advance Rental assumptions Rental period 5 years Rental rate $5.750 /month Mid-year present worth factors for i - 57: Initial - 1.00000 Year 1: ? Year 2:? Year 3:2 Year 4:? Year 5:2 Finallend of Year 51: ? *Hint: For mid-year present worth factor you should consider the average of start of year and end-of-year values