Show Calculations, Formulas (include sub-steps) and Rationales to:

(a) Determine the average annual full cost of buying the Orion machine.

(a) Full Costs
Cost item	Amount	Principle	Rate	Allocation	Reasons/Rationales
Labor:
Processes:
Breakages:
Utilities:
Depreciation/Amortization:
Interests:
Insurances:
Taxes:
Other cost items:
Total Average Annual Costs
Hourly Rate:

EXHIBIT 4: TERRELL MANUFACTURING'S BALANCE SHEET, AT THE END OF 2015 Before Purchasing After Purchasing Orion Orion Machine (Actual) Machine (Projected) Assets Current Assets Cash 44,215 44,215 Accounts Receivable 211,610 211,610 Inventory* 133,537 158,537 Total Current Assets 389,362 414,362 Property and Equipment, at Cost Building 500,000 500,000 Equipment** 196,987 496,987 Other Assets *** 15,210 25,210 Less: Accumulated Depreciation (11,179) (11,179) Net Property and Equipment 701,018 1,011,018 Total Assets 1,090,380 1,425,380 Liabilities and Owner Capital Current Liabilities Accounts Payable 198,918 198,918 Accrued Taxes 3,924 3,924 Working Capital Loan 25,000 Total Current Liabilities 202,842 227,842 Long-Term Debt Loan Payable**** 533,570 843,570 Loan Payable-Louis Palombo 62,358 62,358 Total Long-Term Loan 595,928 905,928 Owners' Capital Capital-Louis Palombo Capital-Vincent Palombo Draw-Louis Palombo Draw-Vincent Palombo Total Owners' Capital Total Liabilities and Owner Capital 174,695 174,695 (31,080) (26,700) 291,610 1,090,380 174,695 174,695 (31,080) (26,700) 291,610 1,425,380 Notes: "Amount equal to additional working capital loan is added in the current assets; **Costs of Orion machine and washing facility of $300,000 added here; ***Installation cost of $10,000 added to other assets as a miscellaneous asset; **** Includes bank loans of $310,000 ($10,000 for installation, $100,000 for washing facility, and $200,000 payable to DPG for Orion machine). Source: Company documents. EXHIBIT 4: TERRELL MANUFACTURING'S BALANCE SHEET, AT THE END OF 2015 Before Purchasing After Purchasing Orion Orion Machine (Actual) Machine (Projected) Assets Current Assets Cash 44,215 44,215 Accounts Receivable 211,610 211,610 Inventory* 133,537 158,537 Total Current Assets 389,362 414,362 Property and Equipment, at Cost Building 500,000 500,000 Equipment** 196,987 496,987 Other Assets *** 15,210 25,210 Less: Accumulated Depreciation (11,179) (11,179) Net Property and Equipment 701,018 1,011,018 Total Assets 1,090,380 1,425,380 Liabilities and Owner Capital Current Liabilities Accounts Payable 198,918 198,918 Accrued Taxes 3,924 3,924 Working Capital Loan 25,000 Total Current Liabilities 202,842 227,842 Long-Term Debt Loan Payable**** 533,570 843,570 Loan Payable-Louis Palombo 62,358 62,358 Total Long-Term Loan 595,928 905,928 Owners' Capital Capital-Louis Palombo Capital-Vincent Palombo Draw-Louis Palombo Draw-Vincent Palombo Total Owners' Capital Total Liabilities and Owner Capital 174,695 174,695 (31,080) (26,700) 291,610 1,090,380 174,695 174,695 (31,080) (26,700) 291,610 1,425,380 Notes: "Amount equal to additional working capital loan is added in the current assets; **Costs of Orion machine and washing facility of $300,000 added here; ***Installation cost of $10,000 added to other assets as a miscellaneous asset; **** Includes bank loans of $310,000 ($10,000 for installation, $100,000 for washing facility, and $200,000 payable to DPG for Orion machine). Source: Company documents