you are considering the purchase of a new lathe for a project. details of this potential purchase are provided below. The project life is 3 years. annual revenues are 13000. annual O&M costs (expenses) of the machine are 2800. the machine are 2800. the machine costs 20000. you will pay cash for 60% of this machine immediately, and will borrow the remaining 40% at a 10 % annual rate compounded annually over 2 years.

the machine will be depreciated using a seven-year MACRS approach

salvage value at the end of year 3 will be 6500

assume an income tax rate and gains tax rate of 21%

enter the net present worth of this project based on a MARR of 15%

to help you out, here are the calculations for repaying the amount that you will borrow.

year1: total payment=46,interest=800. principal=3810

year 2 total payment = 4610,interest=419,principal=4190.

Question 7 25 pts You are considering the purchase of a new lathe for a project. Details of this potential purchase are provided below. The project life is 3 years. Annual revenues are $13.000. Annual O&M costs (expenses) of the machine are $2,800. The machine costs $20,000. You will pay cash for 60% of this machine immediately, and will borrow the remaining 40% at a 10% annual rate compounded annually over 2 years. (See below for calculations on your payment plan.) The machine will be depreciated using a seven-year MACRS approach. Salvage value at the end of year 3 will be $6,500. Assume an income tax rate and gains tax rate of 21%. Enter the Net Present Worth of this project based on a MARR of 15%. To help you out, here are the calculations for repaying the amount that you will borrow: Year 1: Total payment - $4,610; Interest - $800; Principal - $3,810 Year 2: Total payment = $4,610; Interest = $419; Principal = $4,190 Table 9.6 MACRS depreciation schedules for personal properties.pdf Blank cash flow statement 3.xlsx Question 7 25 pts You are considering the purchase of a new lathe for a project. Details of this potential purchase are provided below. The project life is 3 years. Annual revenues are $13.000. Annual O&M costs (expenses) of the machine are $2,800. The machine costs $20,000. You will pay cash for 60% of this machine immediately, and will borrow the remaining 40% at a 10% annual rate compounded annually over 2 years. (See below for calculations on your payment plan.) The machine will be depreciated using a seven-year MACRS approach. Salvage value at the end of year 3 will be $6,500. Assume an income tax rate and gains tax rate of 21%. Enter the Net Present Worth of this project based on a MARR of 15%. To help you out, here are the calculations for repaying the amount that you will borrow: Year 1: Total payment - $4,610; Interest - $800; Principal - $3,810 Year 2: Total payment = $4,610; Interest = $419; Principal = $4,190 Table 9.6 MACRS depreciation schedules for personal properties.pdf Blank cash flow statement 3.xlsx