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please show work and fill out table 7) ( 35 points) Andes Inc. is considering the purchase of a new automated pallet stacking device to
please show work and fill out table
7) ( 35 points) Andes Inc. is considering the purchase of a new automated pallet stacking device to decrease labor costs in its distribution center. For this device, the following data apply: Purchase price =$648,000 \{ $360,000 from own funds (equity) and $288,000 from a loan\} Equipment Life: 4 years Estimated salvage: $129,600 EOY 1 Expected O\&M Costs Depreciation: MACRS-GDS 3-year property Effective tax rate: 35% Estimated Labor Savings $259,200 $288,000 $316,800 $345,600 Conditions on loan: $288,000 borrowed at a nominal rate of 6% per year compounded annually. The loan is to be repaid over 3 years with equal annual payments. a) (10 points) Loan calculations - principal and interest payments. (Round off values to the nearest dollar) b) (25 points) Find the ATCF for each year of this investment (Round off values to the nearest dollar) Step by Step Solution
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