QUESTIONS 11 TO 15 | A firm is considering the purchase of a new computer for $300,000 fully installed. It is expected to have a salvage value of $100,000 after 3 years. Annual revenues from operations will be $500,000 each year and annual operating and maintenance costs $100,000 . . Depreciate the computer using the DB method (d-20%). The before-tax interest rate is 10%. The after-tax interest rate is 5%. A 50% tax rate applies to net income from operations and to the recapturing of depreciation. The half-year rule applies. The firm gets a $150,000 loan (at a 10% rate of interest) which is repaid as follows: Repayment of loan at the end of yer Pe Percentage of loan repaid 25 35 40 2 QUESTIONS 11 TO 15 | A firm is considering the purchase of a new computer for $300,000 fully installed. It is expected to have a salvage value of $100,000 after 3 years. Annual revenues from operations will be $500,000 each year and annual operating and maintenance costs $100,000 . . Depreciate the computer using the DB method (d-20%). The before-tax interest rate is 10%. The after-tax interest rate is 5%. A 50% tax rate applies to net income from operations and to the recapturing of depreciation. The half-year rule applies. The firm gets a $150,000 loan (at a 10% rate of interest) which is repaid as follows: Repayment of loan at the end of yer Pe Percentage of loan repaid 25 35 40 2