Hyundai USA has numerous robotic welders and checkers with vision. One underbody robotic welder costing $1,200,000 (7-year property class) was installed and is increasing productivity by 2.5 percent in one area. The result is a savings of $500,000 per year. Deductible expenses other than depreciation and interest associated with the installed robotic welder are only $120,000. Hyundai borrowed $550,000 at 11 percent for 5 years. They plan to keep the welder for 8 years. Hyundais marginal tax rate is 40 percent, and their MARR is 9 percent after taxes.

Determine the PW, FW, AW, IRR, and ERR for the investment plan shown in the following 4 questions

The loan is paid back using Method 1 - (interest only at the end of each year of the loan, plus principal at the end of the last year).(10 points)

Plan 1	PW
	FW
	AW
	IRR
	ERR

the loan is paid back using Method 2 - (equal annual principal payments plus interest on the unpaid loan balance). (10 points)

Plan 1	PW
	FW
	AW
	IRR
	ERR

The loan is paid back using Method 3 (equal annual principal plus interest payments during each year of the loan). (10 points)

Plan 1	PW
	FW
	AW
	IRR
	ERR

The loan is paid back using Method 4 (principal plus interest is paid at the end of the loan period). (10 points)

Plan 1	PW
	FW
	AW
	IRR
	ERR