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Question

onsider following condition for previous question:

The investor takes $200,000 loan (at time zero)to purchase the machine at 6% interest rate. Loanhas to be repaid by constant annual payments from year 1 to year 5(5 payments).

Assume 38% tax and minimum rate of return10%.

Calculate interest and principle for the payments, BTCF, ATCF,NPV and IRR for this investment.

Solution

xx calculate xxx interest xxx xxxxxxxxx xxx annual xxyxxxxx ,given xx xxx xxxxxxxxxx loan xx $2,00,000

  • In xxxxxxxx xx @ 6% xxx annum xxyxxxx xxxx xx year

  • The xxxx has xx xxxxxx xx 5 yxxxx with xxxxxxxxxx xxxx xxxxx calculate xxx total xxxxxxxx xx xx paid xxx 5years

    Total xxxxxxxx = x,xx,xxx *6% *xxxxxx interest = xxxxx * 5 = 60,000

    The xxxxx xxyxxxx xx be xxxx in x yxxxx xx principal xxxxxxxxxxx is $x,xx,xxxxxx xxx xxxxx EMI xx 2,60,000 /x xx $ 52000 xx which xxxxxxxxxxx $xx,xxx xxx interest xx $12,000

    for xxxx,xxxx,xxx,xxx xxx xxxx flow xxxxxxx is xxxxxxxx . xxxxxxxxxx are xxx provided xx xxx xxxxxxxx

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