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If the Company expands property, plant and equipment, it needs to borrow $800 million with an amortized (principal and interest) payment loan for 8-years at
If the Company expands property, plant and equipment, it needs to borrow $800 million with an amortized (principal and interest) payment loan for 8-years at 3.00%. First, determine the annual payment (end of year) for the Company to fully repay the loan. Second, will the Company be able to deduct the full annual payment from Operating Profit and thereby reduce Income Before Income Taxes and taxes paid? Why?
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