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Consider the before-tax and loan cash flow profile given below. A depreciable asset (7-year property under MACRS) is purchased for $150,000 and has a salvage

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Consider the before-tax and loan cash flow profile given below. A depreciable asset (7-year property under MACRS) is purchased for $150,000 and has a salvage value of $20,000 at the end of the 10 year planning horizon. In order to purchase the machine, the firm borrows $100,000 at an interest rate of 10%, and the loan is repaid with equal end-of-year payments over 10 years. Income taxes are 40% per year. The asset is replacing a current asset that has a market value of $30,000. The revenue from the sale of the current asset is included in the cash flow at t=0. Fill in the blank boxes in the table. Show calculated dollar values to the nearest cent, do not enter the $ sign; do not use the "," for the 1,000: e.g. 2743.12 EOY BT&LCF PPMT IPMT DWO TI ATCF $120,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 10 $40,000 Consider the before-tax and loan cash flow profile given below. A depreciable asset (7-year property under MACRS) is purchased for $150,000 and has a salvage value of $20,000 at the end of the 10 year planning horizon. In order to purchase the machine, the firm borrows $100,000 at an interest rate of 10%, and the loan is repaid with equal end-of-year payments over 10 years. Income taxes are 40% per year. The asset is replacing a current asset that has a market value of $30,000. The revenue from the sale of the current asset is included in the cash flow at t=0. Fill in the blank boxes in the table. Show calculated dollar values to the nearest cent, do not enter the $ sign; do not use the "," for the 1,000: e.g. 2743.12 EOY BT&LCF PPMT IPMT DWO TI ATCF $120,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 10 $40,000

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