Question
It is proposed to carry out the purchase of a new equipment. The initial investment that would have to be made is $12,000. The expected
It is proposed to carry out the purchase of a new equipment. The initial investment that would have to be made is $12,000. The expected useful life of this equipment is six years. Its salvage value at the end of its useful life can be considered zero. The discount rate for this company can be considered 20% in real terms. Suppose there is no inflation. a) What must be the minimum annual net benefit that must be achieved with this equipment (so that the benefit is zero)? b) Make an amortization table that shows that with the six equal payments calculated in the previous point, the principal and interest on unpaid balances are paid.
Please put all the procedure
\begin{tabular}{|r|l|l|l|l|l|} \hline YEAR & Initial balanc Interests (i=20\%) & Addition & Withdrawal & Final balance \\ \hline 0 & & & & & \\ \hline 1 & & & & & \\ \hline 2 & & & & & \\ \hline 3 & & & & & \\ \hline 4 & & & & & \\ \hline 5 & & & & & \\ \hline 6 & & & & & \\ \hline & & & & & \\ \hline Total amount & & & & \\ \hline \end{tabular}Step by Step Solution
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