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Question 4 only, please show relevan equations $600,000 capital cost required for purchasing a machine (at time zero) that can generate revenue of $250,000 with
Question 4 only, please show relevan equations
$600,000 capital cost required for purchasing a machine (at time zero) that can generate revenue of $250,000 with operating cost of $50,000 for six years (from year 1 to year 6). The capital cost is depreciable over 6 years (from year 1 to year 6) based on MACRS 5-year life depreciation with the half year convention (table A-l at IRS). The salvage value will be $150,000 (zero book value) and working capital $100,000. Please calculate NPV and ROR for this project considering the minimum rate of return 10% and 35% income tax. Consider following condition for previous question: The investor takes $300,000 loan (half of the capital cost) at time zero to purchase the machine at 6% interest rate. Loan has to be repaid by constant annual payments from year 1 to year 6 (6 payments). Calculate interest and principal for the payments, BTCF, ATCF, NPV and IRR for this investment
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