PROBLEM 9.44
TAX RATE 40.00%
GI $500,000.00
EXPENSES $120,000.00
BTLCF $380,000.00
DWO $171,480.00
IPMT $60,500.00
PPMT $0.00
a TI=BTLCF-DWO-IPMT= $148,020.00
b T=TAX RATE*TI= $59,208.00
c ATCF=BTLCF-IPMT-PPMT-T= $260,292.00
PROBLEM 9.45
BASIS $850,000.00
TAX RATE 40.00%
GI $750,000.00
EXPENSES $475,000.00
BTLCF $275,000.00
DWO $121,465.00
IPMT $46,750.00
PPMT $85,000.00
a TI=BTLCF-DWO-IPMT= $106,785.00
b T=TAX RATE*TI= $42,714.00
c ATCF=BTLCF-IPMT-PPMT-T= $100,536.00
PROBLEM 9.46
BASIS $480,000.00
BORROWED $275,000.00
INT RATE 12.00%
TAX RATE 40.00%
GI $300,000.00
EXPENSES Y
BTLCF $300,000.00-Y
DWO $68,592.00
IPMT $33,000.00
PPMT $0.00
TI $15,000.00
a TI=GI-Y-DWO-IPMT= $15,000.00
Y=GI-DWO-IPMT-TI $183,408.00
TI=GI-Y-DWO-IPMT= $15,000.00
b T=TAX RATE*TI= $6,000.00
c ATCF=GI-Y-IPMT-PPMT-T= $77,592.00
PROBLEM 9.47
MARRAT = 10% itr = 40% lender’s interest rate = 18%
a Loan Payment Plan 1
EOY BT&LCF PCF ICF DWO TI T ATCF MACRS(7)
0 -$250,000.00 -$200,000.00 -$50,000.00
1 $40,000.00 $0.00 $36,000.00 $35,725.00 -$31,725.00 -$12,690.00 $16,690.00 14.29
2 $40,000.00 $0.00 $36,000.00 $61,225.00 -$57,225.00 -$22,890.00 $26,890.00 24.49
3 $40,000.00 $0.00 $36,000.00 $43,725.00 -$39,725.00 -$15,890.00 $19,890.00 17.49
4 $40,000.00 $0.00 $36,000.00 $31,225.00 -$27,225.00 -$10,890.00 $14,890.00 12.49
5 $140,000.00 $200,000.00 $36,000.00 $11,162.50 $25,900.00 $10,360.00 -$106,360.00 8.93
B5 = $66,937.50 PWAT = -$48,665.09 8.92
8.93
4.46
b Loan Payment Plan 2
EOY BT&LCF PCF ICF DWO TI T ATCF MACRS(7)
0 -$250,000.00 -$200,000.00 -$50,000.00
1 $40,000.00 $40,000.00 $36,000.00 $35,725.00 -$31,725.00 -$12,690.00 -$23,310.00 14.29
2 $40,000.00 $40,000.00 $28,800.00 $61,225.00 -$50,025.00 -$20,010.00 -$8,790.00 24.49
3 $40,000.00 $40,000.00 $21,600.00 $43,725.00 -$25,325.00 -$10,130.00 -$11,470.00 17.49
4 $40,000.00 $40,000.00 $14,400.00 $31,225.00 -$5,625.00 -$2,250.00 -$12,150.00 12.49
5 $140,000.00 $40,000.00 $7,200.00 $11,162.50 $54,700.00 $21,880.00 $70,920.00 8.93
B5 = $66,937.50 PWAT = -$46,668.93 8.92
8.93
4.46
c
NOTE: BECAUSE THE EQUIPMENT IS SOLD BEFORE IT IS FULLY DEPRECIATED AND
THE INTERNAL REVENUE SERVICE ALLOWS ONLY A ONE-HALF YEAR DEPRECIATION
IN THE YEAR OF DISPOSAL, THE DEPRECIATION DEDUCTION IN YEAR 5 IS ONE-HALF
WHAT WOULD NORMALLY OCCUR. HENCE, THE BOOK VALUE AT THE END OF 5
YEARS IS EQUAL TO THE COST BASIS MINUS THE SUM OF THE DEPRECIATION
DEDUCTIONS IN YEARS 1 THRU 5: $250,000 – ($36,725 + $61,225 + $43,725 + $31,225 +
11,162.50) = $66,937.50.
LOAN PAYMENT PLAN 2 IS THE LEAST PREFERRED PAYMENT PLAN OF THE FOUR CONSIDERED IN THE
CHAPTER WHEN THE LENDER’S INTEREST RATE IS GREATER THAN THE BORROWER‘S MARRAT/(1 – itr). HERE,
THE LENDER‘S INTEREST RATE IS 18% AND THE BORROWER’S MARRAT/(1 – itr) IS 16.67%. THEREFORE, PLAN 1 IS
PREFERRED TO PLAN 2.
PROBLEM 9.48
MARRAT = 10% itr = 40% lender’s interest rate = 12%
aLoan Payment Plan 2
EOY BT&LCF PCF ICF DWO TI T ATCF MACRS(5)
0-$800,000 -$500,000 -$300,000
1$100,000 $100,000 $60,000 $160,000 -$120,000 -$48,000 -$12,000 20.00
2$200,000 $100,000 $48,000 $256,000 -$104,000 -$41,600 $93,600 32.00
3$300,000 $100,000 $36,000 $153,600 $110,400 $44,160 $119,840 19.20
4$400,000 $100,000 $24,000 $92,160 $283,840 $113,536 $162,464 11.52
5$700,000 $100,000 $12,000 $46,080 $549,760 $219,904 $368,096 11.52
B5 = $92,160 PWAT = $178,188.73 5.76
bLoan Payment Plan 4
EOY BT&LCF PCF ICF DWO TI T ATCF MACRS(5)
0-$800,000 -$500,000 -$300,000
1$100,000 $0 $0 $160,000 -$60,000 -$24,000 $124,000 20.00
2$200,000 $0 $0 $256,000 -$56,000 -$22,400 $222,400 32.00
3$300,000 $0 $0 $153,600 $146,400 $58,560 $241,440 19.20
4$400,000 $0 $0 $92,160 $307,840 $123,136 $276,864 11.52
5$700,000 $500,000 $381,171 $46,080 $180,589 $72,236 -$253,407 11.52
B5 = $92,160 PWAT = $190,620.64 5.76
c
LOAN PAYMENT PLAN 4 IS PREFERRED WHEN THE LENDER’S INTEREST RATE IS LESS THAN THE
BORROWER’S MARRAT/(1 – itr). HERE, THE LENDER’S INTEREST RATE IS 12% AND THE BORROWER’S
MARRAT/(1 – itr) IS 16.67%. THEREFORE, PLAN 4 IS PREFERRED TO PLAN 2.
NOTE: BECAUSE THE EQUIPMENT IS SOLD BEFORE IT IS FULLY DEPRECIATED AND THE INTERNAL REVENUE
SERVICE ALLOWS ONLY A ONE-HALF YEAR DEPRECIATION IN THE YEAR OF DISPOSAL, THE DEPRECIATION
DEDUCTION IN YEAR 5 IS ONE-HALF WHAT WOULD NORMALLY OCCUR. HENCE, THE BOOK VALUE AT THE
END OF 5 YEARS IS EQUAL TO THE PRODUCT OF THE COST BASIS AND ONE MINUS THE SUM OF ONE-HALF
THE MACRS PERCENTAGE FOR YEAR 5 AND THE MACRS PERCENTAGE FOR YEAR 6: $800,000(0.0756 +.0756)
= $92,160.00.
PROBLEM 9.49
MARRAT = 10% itr = 40% lender’s interest rate = 18%
a Loan Payment Plan 1
EOY BT&LCF PCF ICF DWO TI T ATCF MACRS(5)
0 -$125,000.00 -$50,000.00 -$75,000.00
1 $50,000.00 $0.00 $9,000.00 $25,000.00 $16,000.00 $6,400.00 $34,600.00 20.00
2 $60,000.00 $0.00 $9,000.00 $40,000.00 $11,000.00 $4,400.00 $46,600.00 32.00
3 $70,000.00 $0.00 $9,000.00 $24,000.00 $37,000.00 $14,800.00 $46,200.00 19.20
4 $80,000.00 $0.00 $9,000.00 $14,400.00 $56,600.00 $22,640.00 $48,360.00 11.52
5 $120,000.00 $50,000.00 $9,000.00 $7,200.00 $89,400.00 $35,760.00 $25,240.00 11.52
B5 = $14,400.00 PWAT = $71,254.79 5.76
b Loan Payment Plan 3
EOY BT&LCF PCF ICF DWO TI T ATCF MACRS(5)
0 -$125,000.00 -$50,000.00 -$75,000.00
1 $50,000.00 $6,988.89 $9,000.00 $25,000.00 $16,000.00 $6,400.00 $27,611.11 20.00
2 $60,000.00 $8,246.89 $7,742.00 $40,000.00 $12,258.00 $4,903.20 $39,107.91 32.00
3 $70,000.00 $9,731.33 $6,257.56 $24,000.00 $39,742.44 $15,896.98 $38,114.13 19.20
4 $80,000.00 $11,482.97 $4,505.92 $14,400.00 $61,094.08 $24,437.63 $39,573.48 11.52
5 $120,000.00 $13,549.91 $2,438.98 $7,200.00 $95,961.02 $38,384.41 $65,626.70 11.52
B5 = $14,400.00 PWAT = $71,668.67 5.76
c
LOAN PAYMENT PLAN 3 IS PREFERRED OVER PAYMENT PLAN 1 WHEN THE LENDER’S INTEREST RATE IS
GREATER THAN THE BORROWER’S MARRAT/(1 – itr). HERE, THE LENDER’S INTEREST RATE IS 18% AND THE
BORROWER’S MARRAT/(1 – itr) IS 16.67%. THEREFORE, PLAN 3 IS PREFERRED TO PLAN 1.
NOTE: BECAUSE THE EQUIPMENT IS SOLD BEFORE IT IS FULLY DEPRECIATED AND THE INTERNAL REVENUE
SERVICE ALLOWS ONLY A ONE-HALF YEAR DEPRECIATION IN THE YEAR OF DISPOSAL, THE DEPRECIATION
DEDUCTION IN YEAR 5 IS ONE-HALF WHAT WOULD NORMALLY OCCUR. HENCE, THE BOOK VALUE AT THE END
OF 5 YEARS IS EQUAL TO THE PRODUCT OF THE COST BASIS AND ONE MINUS THE SUM OF ONE-HALF THE
MACRS PERCENTAGE FOR YEAR 5 AND THE MACRS PERCENTAGE FOR YEAR 6: $125,000(0.0756 +.0756) =
$14,400.00.
PROBLEM 9.51
a LOAN PLAN 1
BASIS $850,000.00 LOAN PRINC $425,000.00 BTCF $275,000.00 TAX RATE 40.00%
EST SALV $0.00 LOAN PERIOD 5 USEFUL LIFE 8
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 11.00% PERIODS 8 PLAN 1
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$850,000.00 -$425,000.00 -$425,000.00 $0.00 $425,000.00 -$425,000.00
1 $275,000.00 $0.00 $46,750.00 $121,465.00 $106,785.00 $42,714.00 $185,536.00 $185,536.00 $0.00 $0.00 14.29%
2 $275,000.00 $0.00 $46,750.00 $208,165.00 $20,085.00 $8,034.00 $220,216.00 $220,216.00 $0.00 $0.00 24.49%
3 $275,000.00 $0.00 $46,750.00 $148,665.00 $79,585.00 $31,834.00 $196,416.00 $196,416.00 $0.00 $0.00 17.49%
4 $275,000.00 $0.00 $46,750.00 $106,165.00 $122,085.00 $48,834.00 $179,416.00 $179,416.00 $0.00 $0.00 12.49%
5 $275,000.00 $425,000.00 $46,750.00 $75,905.00 $152,345.00 $60,938.00 -$257,688.00 $0.00 $257,688.00 -$257,688.00 8.93%
6 $275,000.00 $0.00 $0.00 $75,820.00 $199,180.00 $79,672.00 $195,328.00 $195,328.00 $0.00 $0.00 8.92%
7 $275,000.00 $0.00 $0.00 $75,905.00 $199,095.00 $79,638.00 $195,362.00 $195,362.00 $0.00 $0.00 8.93%
8 $275,000.00 $0.00 $0.00 $37,910.00 $237,090.00 $94,836.00 $180,164.00 $180,164.00 $0.00 $1,962,105.23 4.46%
b LOAN PLAN 2
BASIS $850,000.00 LOAN PRINC $425,000.00 BTCF $275,000.00 TAX RATE 40.00%
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 11.00% PERIODS 8 PLAN 2
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$850,000.00 -$425,000.00 -$425,000.00 $0.00 $425,000.00 -$425,000.00
1 $275,000.00 $85,000.00 $46,750.00 $121,465.00 $106,785.00 $42,714.00 $100,536.00 $100,536.00 $0.00 $0.00 14.29%
4 $275,000.00 $85,000.00 $18,700.00 $106,165.00 $150,135.00 $60,054.00 $111,246.00 $111,246.00 $0.00 $0.00 12.49%
5 $275,000.00 $85,000.00 $9,350.00 $75,905.00 $189,745.00 $75,898.00 $104,752.00 $104,752.00 $0.00 $0.00 8.93%
6 $275,000.00 $0.00 $0.00 $75,820.00 $199,180.00 $79,672.00 $195,328.00 $195,328.00 $0.00 $0.00 8.92%
7 $275,000.00 $0.00 $0.00 $75,905.00 $199,095.00 $79,638.00 $195,362.00 $195,362.00 $0.00 $0.00 8.93%
8 $275,000.00 $0.00 $0.00 $37,910.00 $237,090.00 $94,836.00 $180,164.00 $180,164.00 $0.00 $1,576,613.84 4.46%
c LOAN PLAN 3
BASIS $850,000.00 LOAN PRINC $425,000.00 BTCF $275,000.00 TAX RATE 40.00%
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 11.00% PERIODS 8 PLAN 3
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$850,000.00 -$425,000.00 -$425,000.00 $0.00 $425,000.00 -$425,000.00
1 $275,000.00 $68,242.38 $46,750.00 $121,465.00 $106,785.00 $42,714.00 $117,293.62 $117,293.62 $0.00 $0.00 14.29%
4 $275,000.00 $93,330.40 $21,661.99 $106,165.00 $147,173.01 $58,869.21 $101,138.41 $101,138.41 $0.00 $0.00 12.49%
6 $275,000.00 $0.00 $0.00 $75,820.00 $199,180.00 $79,672.00 $195,328.00 $195,328.00 $0.00 $0.00 8.92%
7 $275,000.00 $0.00 $0.00 $75,905.00 $199,095.00 $79,638.00 $195,362.00 $195,362.00 $0.00 $0.00 8.93%
8 $275,000.00 $0.00 $0.00 $37,910.00 $237,090.00 $94,836.00 $180,164.00 $180,164.00 $0.00 $1,581,229.35 4.46%
d LOAN PLAN 4
BASIS $850,000.00 LOAN PRINC $425,000.00 BTCF $275,000.00 TAX RATE 40.00%
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 11.00% PERIODS 8 PLAN 4
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$850,000.00 -$425,000.00 -$425,000.00 $0.00 $425,000.00 -$425,000.00
1 $275,000.00 $0.00 $0.00 $121,465.00 $153,535.00 $61,414.00 $213,586.00 $213,586.00 $0.00 $0.00 14.29%
2 $275,000.00 $0.00 $0.00 $208,165.00 $66,835.00 $26,734.00 $248,266.00 $248,266.00 $0.00 $0.00 24.49%
3 $275,000.00 $0.00 $0.00 $148,665.00 $126,335.00 $50,534.00 $224,466.00 $224,466.00 $0.00 $0.00 17.49%
4 $275,000.00 $0.00 $0.00 $106,165.00 $168,835.00 $67,534.00 $207,466.00 $207,466.00 $0.00 $0.00 12.49%
6 $275,000.00 $0.00 $0.00 $75,820.00 $199,180.00 $79,672.00 $195,328.00 $195,328.00 $0.00 $0.00 8.92%
7 $275,000.00 $0.00 $0.00 $75,905.00 $199,095.00 $79,638.00 $195,362.00 $195,362.00 $0.00 $0.00 8.93%
BOOK VALUE
FWAT = $703,516.26
$0.00
AWAT = $61,518.29
IRRAT = 35.75%
ERRAT = 17.11%
PROBLEM 9.52
a O&M COST= Y= $300,000-BTCF= $220,209.06
LOAN PLAN 1
BASIS $480,000.00 LOAN PRINC $275,000.00 BTCF $79,790.94 GOAL SEEK CHANGED CELL TAX RATE 40.00%
EST SALV $0.00 LOAN PERIOD 10 USEFUL LIFE 10
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 12.00% PERIODS 10 PLAN 1
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$480,000.00 -$275,000.00 -$205,000.00 $0.00 $205,000.00 -$205,000.00
1$79,790.94 $0.00 $33,000.00 $68,592.00 -$21,801.06 -$8,720.42 $55,511.37 $55,511.37 $0.00 $0.00 14.29%
2$79,790.94 $0.00 $33,000.00 $117,552.00 -$70,761.06 -$28,304.42 $75,095.37 $75,095.37 $0.00 $0.00 24.49%
3$79,790.94 $0.00 $33,000.00 $83,952.00 -$37,161.06 -$14,864.42 $61,655.37 $61,655.37 $0.00 $0.00 17.49%
4$79,790.94 $0.00 $33,000.00 $59,952.00 -$13,161.06 -$5,264.42 $52,055.37 $52,055.37 $0.00 $0.00 12.49%
5$79,790.94 $0.00 $33,000.00 $42,864.00 $3,926.94 $1,570.78 $45,220.17 $45,220.17 $0.00 $0.00 8.93%
6$79,790.94 $0.00 $33,000.00 $42,816.00 $3,974.94 $1,589.98 $45,200.97 $45,200.97 $0.00 $0.00 8.92%
7$79,790.94 $0.00 $33,000.00 $42,864.00 $3,926.94 $1,570.78 $45,220.17 $45,220.17 $0.00 $0.00 8.93%
8$79,790.94 $0.00 $33,000.00 $21,408.00 $25,382.94 $10,153.18 $36,637.77 $36,637.77 $0.00 $0.00 4.46%
9$79,790.94 $0.00 $33,000.00 $0.00 $46,790.94 $18,716.38 $28,074.57 $28,074.57 $0.00 $0.00
10 $79,790.94 $275,000.00 $33,000.00 $0.00 $46,790.94 $18,716.38 -$246,925.43 $0.00 $246,925.43 $531,717.20
SUM DEPR
MARRAT = 10%
$480,000.00
PWAT = $0.00 GOAL SEEK SET CELL
BOOK VALUE
FWAT = $0.00
$0.00
AWAT = $0.00
IRRAT = 10.00%
ERRAT = 10.00%
b O&M COST= Y= $300,000-BTCF= $215,428.05
LOAN PLAN 1
BASIS $480,000.00 LOAN PRINC $275,000.00 BTCF $84,571.95 GOAL SEEK CHANGED CELL TAX RATE 40.00%
EST SALV $0.00 LOAN PERIOD 10 USEFUL LIFE 10
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 12.00% PERIODS 10 PLAN 2
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$480,000.00 -$275,000.00 -$205,000.00 $0.00 $205,000.00 -$205,000.00
1$84,571.95 $27,500.00 $33,000.00 $68,592.00 -$17,020.05 -$6,808.02 $30,879.97 $30,879.97 $0.00 $0.00 14.29%
2$84,571.95 $27,500.00 $29,700.00 $117,552.00 -$62,680.05 -$25,072.02 $52,443.97 $52,443.97 $0.00 $0.00 24.49%
3$84,571.95 $27,500.00 $26,400.00 $83,952.00 -$25,780.05 -$10,312.02 $40,983.97 $40,983.97 $0.00 $0.00 17.49%
4$84,571.95 $27,500.00 $23,100.00 $59,952.00 $1,519.95 $607.98 $33,363.97 $33,363.97 $0.00 $0.00 12.49%
5$84,571.95 $27,500.00 $19,800.00 $42,864.00 $21,907.95 $8,763.18 $28,508.77 $28,508.77 $0.00 $0.00 8.93%
6$84,571.95 $27,500.00 $16,500.00 $42,816.00 $25,255.95 $10,102.38 $30,469.57 $30,469.57 $0.00 $0.00 8.92%
7$84,571.95 $27,500.00 $13,200.00 $42,864.00 $28,507.95 $11,403.18 $32,468.77 $32,468.77 $0.00 $0.00 8.93%
8$84,571.95 $27,500.00 $9,900.00 $21,408.00 $53,263.95 $21,305.58 $25,866.37 $25,866.37 $0.00 $0.00 4.46%
9$84,571.95 $27,500.00 $6,600.00 $0.00 $77,971.95 $31,188.78 $19,283.17 $19,283.17 $0.00 $0.00
PWAT = $0.00 GOAL SEEK SET CELL
FWAT = $0.00
AWAT = $0.00
IRRAT = 10.00%
ERRAT = 10.00%
c O&M COST= Y= $300,000-BTCF= $216,512.27
LOAN PLAN 1
BASIS $480,000.00 LOAN PRINC $275,000.00 BTCF $83,487.73 GOAL SEEK CHANGED CELL TAX RATE 40.00%
MARRAT 10.00%
RCVD SALV $0.00 LOAN INT 12.00% PERIODS 10 PLAN 3
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$480,000.00 -$275,000.00 -$205,000.00 $0.00 $205,000.00 -$205,000.00
1$83,487.73 $15,670.65 $33,000.00 $68,592.00 -$18,104.27 -$7,241.71 $42,058.80 $42,058.80 $0.00 $0.00 14.29%
2$83,487.73 $17,551.12 $31,119.52 $117,552.00 -$65,183.79 -$26,073.52 $60,890.60 $60,890.60 $0.00 $0.00 24.49%
3$83,487.73 $19,657.26 $29,013.39 $83,952.00 -$29,477.65 -$11,791.06 $46,608.15 $46,608.15 $0.00 $0.00 17.49%
4$83,487.73 $22,016.13 $26,654.52 $59,952.00 -$3,118.78 -$1,247.51 $36,064.60 $36,064.60 $0.00 $0.00 12.49%
5$83,487.73 $24,658.06 $24,012.58 $42,864.00 $16,611.15 $6,644.46 $28,172.63 $28,172.63 $0.00 $0.00 8.93%
6$83,487.73 $27,617.03 $21,053.61 $42,816.00 $19,618.12 $7,847.25 $26,969.84 $26,969.84 $0.00 $0.00 8.92%
7$83,487.73 $30,931.07 $17,739.57 $42,864.00 $22,884.16 $9,153.67 $25,663.42 $25,663.42 $0.00 $0.00 8.93%
8$83,487.73 $34,642.80 $14,027.84 $21,408.00 $48,051.89 $19,220.76 $15,596.33 $15,596.33 $0.00 $0.00 4.46%
9$83,487.73 $38,799.94 $9,870.70 $0.00 $73,617.03 $29,446.81 $5,370.28 $5,370.28 $0.00 $0.00
MARRAT = 10%
PWAT = $0.00 GOAL SEEK SET CELL
FWAT = $0.00
AWAT = $0.00
IRRAT = 10.00%
ERRAT = 10.00%
d O&M COST= Y= $300,000-BTCF $216,872.68
BASIS $480,000.00 LOAN PRINC $275,000.00 BTCF $83,127.32 GOAL SEEK CHANGED CELL TAX RATE 40.00%
0 -$480,000.00 -$275,000.00 -$205,000.00 $0.00 $205,000.00 -$205,000.00
1$83,127.32 $0.00 $0.00 $68,592.00 $14,535.32 $5,814.13 $77,313.19 $77,313.19 $0.00 $0.00 14.29%
2$83,127.32 $0.00 $0.00 $117,552.00 -$34,424.68 -$13,769.87 $96,897.19 $96,897.19 $0.00 $0.00 24.49%
3$83,127.32 $0.00 $0.00 $83,952.00 -$824.68 -$329.87 $83,457.19 $83,457.19 $0.00 $0.00 17.49%
4$83,127.32 $0.00 $0.00 $59,952.00 $23,175.32 $9,270.13 $73,857.19 $73,857.19 $0.00 $0.00 12.49%
5$83,127.32 $0.00 $0.00 $42,864.00 $40,263.32 $16,105.33 $67,021.99 $67,021.99 $0.00 $0.00 8.93%
6$83,127.32 $0.00 $0.00 $42,816.00 $40,311.32 $16,124.53 $67,002.79 $67,002.79 $0.00 $0.00 8.92%
7$83,127.32 $0.00 $0.00 $42,864.00 $40,263.32 $16,105.33 $67,021.99 $67,021.99 $0.00 $0.00 8.93%
8$83,127.32 $0.00 $0.00 $21,408.00 $61,719.32 $24,687.73 $58,439.59 $58,439.59 $0.00 $0.00 4.46%
9$83,127.32 $0.00 $0.00 $0.00 $83,127.32 $33,250.93 $49,876.39 $49,876.39 $0.00 $0.00
10 $83,127.32 $275,000.00 $579,108.26 $0.00 -$495,980.94 -$198,392.37 -$572,588.56 $0.00 $572,588.56 $531,717.20
SUM DEPR
MARRAT = 10%
$480,000.00
PWAT = $0.00 GOAL SEEK SET CELL
BOOK VALUE
FWAT = $0.00
$0.00
AWAT = $0.00
IRRAT = 10.00%
ERRAT = 10.00%
PROBLEM 9.53
a SLN LOAN PLAN 1
BASIS $1,400,000.00 LOAN PRINC $600,000.00 BTCF $400,000.00 TAX RATE 40.00%
EST SALV $200,000.00 LOAN PERIOD 5 USEFUL LIFE 8
MARRAT 10.00%
RCVD SALV $200,000.00 LOAN INT 11.00% PERIODS 8 PLAN 1
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF
0 -$1,400,000.00 -$600,000.00 -$800,000.00 $0.00 $800,000.00 –$800,000.00
1$400,000.00 $0.00 $66,000.00 $150,000.00 $184,000.00 $73,600.00 $260,400.00 $260,400.00 $0.00 $0.00
2$400,000.00 $0.00 $66,000.00 $150,000.00 $184,000.00 $73,600.00 $260,400.00 $260,400.00 $0.00 $0.00
3$400,000.00 $0.00 $66,000.00 $150,000.00 $184,000.00 $73,600.00 $260,400.00 $260,400.00 $0.00 $0.00
4$400,000.00 $0.00 $66,000.00 $150,000.00 $184,000.00 $73,600.00 $260,400.00 $260,400.00 $0.00 $0.00
5$400,000.00 $600,000.00 $66,000.00 $150,000.00 $184,000.00 $73,600.00 -$339,600.00 $0.00 $339,600.00 -$339,600.00
6$400,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $300,000.00 $300,000.00 $0.00 $0.00
7$400,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $300,000.00 $300,000.00 $0.00 $0.00
8$600,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $500,000.00 $500,000.00 $0.00 $2,962,388.86
SUM DEPR
MARRAT = 10%
$1,200,000.00
PWAT = $371,111.39
BOOK VALUE
FWAT = $795,510.21
$200,000.00
AWAT = $69,562.61
IRRAT = 21.61%
ERRAT = 14.99%
b SLN LOAN PLAND 2
BASIS $1,400,000.00 LOAN PRINC $600,000.00 BTCF $400,000.00 TAX RATE 40.00%
EST SALV $200,000.00 LOAN PERIOD 5 USEFUL LIFE 8
MARRAT 10.00%
RCVD SALV $200,000.00 LOAN INT 11.00% PERIODS 8 PLAN 2
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF
0 -$1,400,000.00 -$600,000.00 -$800,000.00 $0.00 $800,000.00 –$800,000.00
1$400,000.00 $120,000.00 $66,000.00 $150,000.00 $184,000.00 $73,600.00 $140,400.00 $140,400.00 $0.00 $0.00
2$400,000.00 $120,000.00 $52,800.00 $150,000.00 $197,200.00 $78,880.00 $148,320.00 $148,320.00 $0.00 $0.00
3$400,000.00 $120,000.00 $39,600.00 $150,000.00 $210,400.00 $84,160.00 $156,240.00 $156,240.00 $0.00 $0.00
4$400,000.00 $120,000.00 $26,400.00 $150,000.00 $223,600.00 $89,440.00 $164,160.00 $164,160.00 $0.00 $0.00
5$400,000.00 $120,000.00 $13,200.00 $150,000.00 $236,800.00 $94,720.00 $172,080.00 $172,080.00 $0.00 $0.00
6$400,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $300,000.00 $300,000.00 $0.00 $0.00
7$400,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $300,000.00 $300,000.00 $0.00 $0.00
8$600,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $500,000.00 $500,000.00 $0.00 $2,450,369.03
SUM DEPR
MARRAT = 10%
$1,200,000.00
PWAT = $343,115.24
BOOK VALUE
FWAT = $735,497.98
$200,000.00
AWAT = $64,314.90
IRRAT = 18.61%
ERRAT = 15.02%
c SLN LOAN PLAN 3
BASIS $1,400,000.00 LOAN PRINC $600,000.00 BTCF $400,000.00 TAX RATE 40.00%
MARRAT 10.00%
RCVD SALV $200,000.00 LOAN INT 11.00% PERIODS 8 PLAN 3
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF
0 -$1,400,000.00 -$600,000.00 -$800,000.00 $0.00 $800,000.00 –$800,000.00
1$400,000.00 $96,342.19 $66,000.00 $150,000.00 $184,000.00 $73,600.00 $164,057.81 $164,057.81 $0.00 $0.00
2$400,000.00 $106,939.83 $55,402.36 $150,000.00 $194,597.64 $77,839.06 $159,818.76 $159,818.76 $0.00 $0.00
3$400,000.00 $118,703.21 $43,638.98 $150,000.00 $206,361.02 $82,544.41 $155,113.41 $155,113.41 $0.00 $0.00
4$400,000.00 $131,760.56 $30,581.63 $150,000.00 $219,418.37 $87,767.35 $149,890.46 $149,890.46 $0.00 $0.00
5$400,000.00 $146,254.22 $16,087.96 $150,000.00 $233,912.04 $93,564.81 $144,093.00 $144,093.00 $0.00 $0.00
6$400,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $300,000.00 $300,000.00 $0.00 $0.00
7$400,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $300,000.00 $300,000.00 $0.00 $0.00
8$600,000.00 $0.00 $0.00 $150,000.00 $250,000.00 $100,000.00 $500,000.00 $500,000.00 $0.00 $2,456,885.05
MARRAT = 10%
PWAT = $346,155.01
FWAT = $742,014.00
AWAT = $64,884.69
IRRAT = 18.89%
ERRAT = 15.06%
d MACRS(5) LOAN PLAN 1
BASIS $1,400,000.00 LOAN PRINC $600,000.00 BTCF $400,000.00 TAX RATE 40.00%
MARRAT 10.00%
RCVD SALV $200,000.00 LOAN INT 11.00% PERIODS 8 PLAN 1
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(5)
0 -$1,400,000.00 -$600,000.00 -$800,000.00 $0.00 $800,000.00 –$800,000.00
1$400,000.00 $0.00 $66,000.00 $280,000.00 $54,000.00 $21,600.00 $312,400.00 $312,400.00 $0.00 $0.00 20.00%
2$400,000.00 $0.00 $66,000.00 $448,000.00 -$114,000.00 -$45,600.00 $379,600.00 $379,600.00 $0.00 $0.00 32.00%
3$400,000.00 $0.00 $66,000.00 $268,800.00 $65,200.00 $26,080.00 $307,920.00 $307,920.00 $0.00 $0.00 19.20%
4$400,000.00 $0.00 $66,000.00 $161,280.00 $172,720.00 $69,088.00 $264,912.00 $264,912.00 $0.00 $0.00 11.52%
5$400,000.00 $600,000.00 $66,000.00 $161,280.00 $172,720.00 $69,088.00 -$335,088.00 $0.00 $335,088.00 -$335,088.00 11.52%
6$400,000.00 $0.00 $0.00 $80,640.00 $319,360.00 $127,744.00 $272,256.00 $272,256.00 $0.00 $0.00 5.76%
7$400,000.00 $0.00 $0.00 $0.00 $400,000.00 $160,000.00 $240,000.00 $240,000.00 $0.00 $0.00
8$600,000.00 $0.00 $0.00 $0.00 $600,000.00 $240,000.00 $360,000.00 $360,000.00 $0.00 $3,118,459.44
IRRAT = 26.72%
ERRAT = 15.86%
e MACRS(5) LOAN PLAN 2
BASIS $1,400,000.00 LOAN PRINC $600,000.00 BTCF $400,000.00 TAX RATE 40.00%
EST SALV $200,000.00 LOAN PERIOD 5 USEFUL LIFE 8
MARRAT 10.00%
RCVD SALV $200,000.00 LOAN INT 11.00% PERIODS 8 PLAN 2
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(5)
0 -$1,400,000.00 -$600,000.00 -$800,000.00 $0.00 $800,000.00 –$800,000.00
1$400,000.00 $120,000.00 $66,000.00 $280,000.00 $54,000.00 $21,600.00 $192,400.00 $192,400.00 $0.00 $0.00 20.00%
2$400,000.00 $120,000.00 $52,800.00 $448,000.00 -$100,800.00 -$40,320.00 $267,520.00 $267,520.00 $0.00 $0.00 32.00%
3$400,000.00 $120,000.00 $39,600.00 $268,800.00 $91,600.00 $36,640.00 $203,760.00 $203,760.00 $0.00 $0.00 19.20%
4$400,000.00 $120,000.00 $26,400.00 $161,280.00 $212,320.00 $84,928.00 $168,672.00 $168,672.00 $0.00 $0.00 11.52%
5$400,000.00 $120,000.00 $13,200.00 $161,280.00 $225,520.00 $90,208.00 $176,592.00 $176,592.00 $0.00 $0.00 11.52%
6$400,000.00 $0.00 $0.00 $80,640.00 $319,360.00 $127,744.00 $272,256.00 $272,256.00 $0.00 $0.00 5.76%
7$400,000.00 $0.00 $0.00 $0.00 $400,000.00 $160,000.00 $240,000.00 $240,000.00 $0.00 $0.00
8$600,000.00 $0.00 $0.00 $0.00 $600,000.00 $240,000.00 $360,000.00 $360,000.00 $0.00 $2,612,445.07
SUM DEPR
MARRAT = 10%
$1,400,000.00
PWAT = $418,724.91
BOOK VALUE
FWAT = $897,574.03
$0.00
AWAT = $78,487.48
IRRAT = 22.28%
ERRAT = 15.94%
f MACRS(5) LOAN PLAN 3
BASIS $1,400,000.00 LOAN PRINC $600,000.00 BTCF $400,000.00 TAX RATE 40.00%
EST SALV $200,000.00 LOAN PERIOD 5 USEFUL LIFE 8
MARRAT 10.00%
RCVD SALV $200,000.00 LOAN INT 11.00% PERIODS 8 PLAN 3
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(5)
0 -$1,400,000.00 -$600,000.00 -$800,000.00 $0.00 $800,000.00 –$800,000.00
1$400,000.00 $96,342.19 $66,000.00 $280,000.00 $54,000.00 $21,600.00 $216,057.81 $216,057.81 $0.00 $0.00 20.00%
2$400,000.00 $106,939.83 $55,402.36 $448,000.00 -$103,402.36 -$41,360.94 $279,018.76 $279,018.76 $0.00 $0.00 32.00%
3$400,000.00 $118,703.21 $43,638.98 $268,800.00 $87,561.02 $35,024.41 $202,633.41 $202,633.41 $0.00 $0.00 19.20%
4$400,000.00 $131,760.56 $30,581.63 $161,280.00 $208,138.37 $83,255.35 $154,402.46 $154,402.46 $0.00 $0.00 11.52%
5$400,000.00 $146,254.22 $16,087.96 $161,280.00 $222,632.04 $89,052.81 $148,605.00 $148,605.00 $0.00 $0.00 11.52%
6$400,000.00 $0.00 $0.00 $80,640.00 $319,360.00 $127,744.00 $272,256.00 $272,256.00 $0.00 $0.00 5.76%
7$400,000.00 $0.00 $0.00 $0.00 $400,000.00 $160,000.00 $240,000.00 $240,000.00 $0.00 $0.00
8$600,000.00 $0.00 $0.00 $0.00 $600,000.00 $240,000.00 $360,000.00 $360,000.00 $0.00 $2,618,961.10
SUM DEPR
MARRAT = 10%
$1,400,000.00
PWAT = $421,764.68
BOOK VALUE
FWAT = $904,090.05
$0.00
AWAT = $79,057.27
IRRAT = 22.69%
ERRAT = 15.98%
PROBLEM 9.54
a SLN LOAN PLAN 1
BASIS $3,000,000.00 LOAN PRINC $1,500,000.00 BTCF $500,000.00 TAX RATE 40.00%
EST SALV $250,000.00 LOAN PERIOD 8 USEFUL LIFE 30
MARRAT 9.00%
RCVD SALV $550,000.00 LOAN INT 11.00% PERIODS 10 PLAN 1
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF
0 -$3,000,000.00 -$1,500,000.00 -$1,500,000.00 $0.00 $1,500,000.00 -$1,500,000.00
1 $500,000.00 $0.00 $165,000.00 $91,666.67 $243,333.33 $97,333.33 $237,666.67 $237,666.67 $0.00 $0.00
2 $512,000.00 $0.00 $165,000.00 $91,666.67 $255,333.33 $102,133.33 $244,866.67 $244,866.67 $0.00 $0.00
3 $524,288.00 $0.00 $165,000.00 $91,666.67 $267,621.33 $107,048.53 $252,239.47 $252,239.47 $0.00 $0.00
4 $536,870.91 $0.00 $165,000.00 $91,666.67 $280,204.25 $112,081.70 $259,789.21 $259,789.21 $0.00 $0.00
5 $549,755.81 $0.00 $165,000.00 $91,666.67 $293,089.15 $117,235.66 $267,520.15 $267,520.15 $0.00 $0.00
6 $562,949.95 $0.00 $165,000.00 $91,666.67 $306,283.29 $122,513.31 $275,436.64 $275,436.64 $0.00 $0.00
7 $576,460.75 $0.00 $165,000.00 $91,666.67 $319,794.09 $127,917.63 $283,543.12 $283,543.12 $0.00 $0.00
8 $590,295.81 $1,500,000.00 $165,000.00 $91,666.67 $333,629.14 $133,451.66 -$1,208,155.85 $0.00 $1,208,155.85 -$1,208,155.85
9 $604,462.91 $0.00 $0.00 $91,666.67 $512,796.24 $205,118.50 $399,344.41 $399,344.41 $0.00 $0.00
10 $1,168,970.02 $0.00 $0.00 $91,666.67 -$1,006,029.98 -$402,411.99 $1,571,382.01 $1,571,382.01 $0.00 $5,075,173.14
BASIS $3,000,000.00 LOAN PRINC $1,500,000.00 BTCF $500,000.00 TAX RATE 40.00%
EST SALV $250,000.00 LOAN PERIOD 8 USEFUL LIFE 30
MARRAT 9.00%
RCVD SALV $550,000.00 LOAN INT 11.00% PERIODS 10 PLAN 2
MARRAT 9.00%
MARRAT 9.00%
$1,527,705.00
PWAT = $105,148.18
BOOK VALUE
FWAT = $248,923.98
$1,472,295.00
AWAT = $16,384.20
IRRAT = 10.52%
ERRAT = 9.69%
e MACRS(20) LOAN PLAN 2
BASIS $3,000,000.00 LOAN PRINC $1,500,000.00 BTCF $500,000.00 TAX RATE 40.00%
EST SALV $250,000.00 LOAN PERIOD 8 USEFUL LIFE 30
MARRAT 9.00%
RCVD SALV $550,000.00 LOAN INT 11.00% PERIODS 10 PLAN 2
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(20)
0 -$3,000,000.00 -$1,500,000.00 -$1,500,000.00 $0.00 $1,500,000.00 -$1,500,000.00
1 $500,000.00 $187,500.00 $165,000.00 $112,500.00 $222,500.00 $89,000.00 $58,500.00 $58,500.00 $0.00 $0.00 3.750%
2 $512,000.00 $187,500.00 $144,375.00 $216,570.00 $151,055.00 $60,422.00 $119,703.00 $119,703.00 $0.00 $0.00 7.219%
3 $524,288.00 $187,500.00 $123,750.00 $200,310.00 $200,228.00 $80,091.20 $132,946.80 $132,946.80 $0.00 $0.00 6.677%
4 $536,870.91 $187,500.00 $103,125.00 $185,310.00 $248,435.91 $99,374.36 $146,871.55 $146,871.55 $0.00 $0.00 6.177%
5 $549,755.81 $187,500.00 $82,500.00 $171,390.00 $295,865.81 $118,346.33 $161,409.49 $161,409.49 $0.00 $0.00 5.713%
6 $562,949.95 $187,500.00 $61,875.00 $158,550.00 $342,524.95 $137,009.98 $176,564.97 $176,564.97 $0.00 $0.00 5.285%
7 $576,460.75 $187,500.00 $41,250.00 $146,640.00 $388,570.75 $155,428.30 $192,282.45 $192,282.45 $0.00 $0.00 4.888%
8 $590,295.81 $187,500.00 $20,625.00 $135,660.00 $434,010.81 $173,604.32 $208,566.49 $208,566.49 $0.00 $0.00 4.522%
9 $604,462.91 $0.00 $0.00 $133,860.00 $470,602.91 $188,241.16 $416,221.75 $416,221.75 $0.00 $0.00 4.462%
10 $1,168,970.02 $0.00 $0.00 $66,915.00 -$370,239.98 -$148,095.99 $1,317,066.01 $1,317,066.01 $0.00 $3,620,063.00 2.231%
SUM DEPR
MARRAT = 9%
$1,527,705.00
PWAT = $29,153.73
BOOK VALUE
FWAT = $69,017.49
$1,472,295.00
AWAT = $4,542.74
IRRAT = 9.29%
ERRAT = 9.21%
f MACRS(20) LOAN PLAN 3
BASIS $3,000,000.00 LOAN PRINC $1,500,000.00 BTCF $500,000.00 TAX RATE 40.00%
EST SALV $250,000.00 LOAN PERIOD 8 USEFUL LIFE 30
MARRAT 9.00%
RCVD SALV $550,000.00 LOAN INT 11.00% PERIODS 10 PLAN 3
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(20)
0 -$3,000,000.00 -$1,500,000.00 -$1,500,000.00 $0.00 $1,500,000.00 -$1,500,000.00
1 $500,000.00 $126,481.58 $165,000.00 $112,500.00 $222,500.00 $89,000.00 $119,518.42 $119,518.42 $0.00 $0.00 3.750%
2 $512,000.00 $140,394.56 $151,087.03 $216,570.00 $144,342.97 $57,737.19 $162,781.23 $162,781.23 $0.00 $0.00 7.219%
3 $524,288.00 $155,837.96 $135,643.62 $200,310.00 $188,334.38 $75,333.75 $157,472.67 $157,472.67 $0.00 $0.00 6.677%
4 $536,870.91 $172,980.13 $118,501.45 $185,310.00 $233,059.46 $93,223.78 $152,165.55 $152,165.55 $0.00 $0.00 6.177%
5 $549,755.81 $192,007.95 $99,473.64 $171,390.00 $278,892.18 $111,556.87 $146,717.36 $146,717.36 $0.00 $0.00 5.713%
6 $562,949.95 $213,128.82 $78,352.76 $158,550.00 $326,047.19 $130,418.88 $141,049.50 $141,049.50 $0.00 $0.00 5.285%
7 $576,460.75 $236,572.99 $54,908.59 $146,640.00 $374,912.16 $149,964.86 $135,014.31 $135,014.31 $0.00 $0.00 4.888%
8 $590,295.81 $262,596.02 $28,885.56 $135,660.00 $425,750.25 $170,300.10 $128,514.13 $128,514.13 $0.00 $0.00 4.522%
9 $604,462.91 $0.00 $0.00 $133,860.00 $470,602.91 $188,241.16 $416,221.75 $416,221.75 $0.00 $0.00 4.462%
10 $1,168,970.02 $0.00 $0.00 $66,915.00 -$370,239.98 -$148,095.99 $1,317,066.01 $1,317,066.01 $0.00 $3,650,124.61 2.231%
SUM DEPR
MARRAT = 9%
$1,527,705.00
PWAT = $41,852.08
BOOK VALUE
FWAT = $99,079.10
$1,472,295.00
AWAT = $6,521.40
IRRAT = 9.44%
ERRAT = 9.30%
PROBLEM 9.55
a NET SAVINGS= X= $428,632.84
LOAN PLAN 1
BASIS $1,800,000.00 LOAN PRINC $810,000.00 BTCF $428,632.84 GOAL SEEK CHANGED CELL TAX RATE 40.00%
EST SALV $250,000.00 LOAN PERIOD 4 USEFUL LIFE 6
MARRAT 11.00%
RCVD SALV $250,000.00 LOAN INT 12.50% PERIODS 6 METHOD 1
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(5)
0 -$1,800,000.00 -$810,000.00 -$990,000.00 $0.00 $990,000.00 -$990,000.00
1 $428,632.84 $0.00 $101,250.00 $360,000.00 -$32,617.16 -$13,046.86 $340,429.70 $340,429.70 $0.00 $0.00 20.00%
2 $428,632.84 $0.00 $101,250.00 $576,000.00 -$248,617.16 –$99,446.86 $426,829.70 $426,829.70 $0.00 $0.00 32.00%
3 $428,632.84 $0.00 $101,250.00 $345,600.00 -$18,217.16 -$7,286.86 $334,669.70 $334,669.70 $0.00 $0.00 19.20%
4 $428,632.84 $810,000.00 $101,250.00 $207,360.00 $120,022.84 $48,009.14 -$530,626.30 $0.00 $530,626.30 -$530,626.30 11.52%
5 $428,632.84 $0.00 $0.00 $207,360.00 $221,272.84 $88,509.14 $340,123.70 $340,123.70 $0.00 $0.00 11.52%
6 $678,632.84 $0.00 $0.00 $103,680.00 $574,952.84 $229,981.14 $448,651.70 $448,651.70 $0.00 $2,505,495.07 5.76%
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(5)
0 -$1,800,000.00 -$810,000.00 -$990,000.00 $0.00 $990,000.00 -$990,000.00
1 $440,500.23 $202,500.00 $101,250.00 $360,000.00 -$20,749.77 -$8,299.91 $145,050.14 $145,050.14 $0.00 $0.00 20.00%
2 $440,500.23 $202,500.00 $75,937.50 $576,000.00 -$211,437.27 -$84,574.91 $246,637.64 $246,637.64 $0.00 $0.00 32.00%
3 $440,500.23 $202,500.00 $50,625.00 $345,600.00 $44,275.23 $17,710.09 $169,665.14 $169,665.14 $0.00 $0.00 19.20%
4 $440,500.23 $202,500.00 $25,312.50 $207,360.00 $207,827.73 $83,131.09 $129,556.64 $129,556.64 $0.00 $0.00 11.52%
EOY BT&LCF PPMT IPMT DWO TI T ATCF ATCF+ ATCF- ATCF MACRS(5)
0 -$1,800,000.00 -$810,000.00 -$990,000.00 $0.00 $990,000.00 -$990,000.00
1 $439,301.61 $168,243.41 $101,250.00 $360,000.00 -$21,948.39 -$8,779.35 $178,587.56 $178,587.56 $0.00 $0.00 20.00%
2 $439,301.61 $189,273.83 $80,219.57 $576,000.00 -$216,917.96 -$86,767.18 $256,575.39 $256,575.39 $0.00 $0.00 32.00%
3 $439,301.61 $212,933.06 $56,560.34 $345,600.00 $37,141.27 $14,856.51 $154,951.70 $154,951.70 $0.00 $0.00 19.20%
4 $439,301.61 $239,549.70 $29,943.71 $207,360.00 $201,997.90 $80,799.16 $89,009.05 $89,009.05 $0.00 $0.00 11.52%
ERRAT = 11.00%
PROBLEM 9.56
a PROP CLASS= MACRS(7)
b MARR= 12.00%
c SALV VAL= $5,000.00
d LOAN INT= 15.00%
e AS SHOWN NOTE DIFFERENT FORMAT AND NOTATION FOR PRACTICE
BASIS $90,000.00 LOAN PRINC $30,000.00 BTCF $35,000.00 TAX RATE 42.00%
EST SALV $5,000.00 LOAN PERIOD 3 USEFUL LIFE 10
MARRAT 12.00%
RCVD SALV $5,000.00 LOAN INT 15.00% PERIODS 3 PLAN 3
EOY BT&LCF PPMT PRINC REMAIN IPMT DWO BOOK VALUE TI T ATCF PWATCF ATCF+ ATCF- ATCF MACRS(7)
0 -$90,000.00 -$30,000.00 $30,000.00 $90,000.00 -$60,000.00 -$60,000.00 $0.00 $60,000.00 -$60,000.00
1 $35,000.00 $8,639.31 $21,360.69 $4,500.00 $12,861.00 $77,139.00 $17,639.00 $7,408.38 $14,452.31 $12,903.85 $14,452.31 $0.00 $0.00 14.290%
2 $35,000.00 $9,935.21 $11,425.49 $3,204.10 $22,041.00 $55,098.00 $9,754.90 $4,097.06 $17,763.63 $14,161.06 $17,763.63 $0.00 $0.00 24.490%
3 $40,000.00 $11,425.49 $0.00 $1,713.82 $7,870.50 $47,227.50 -$16,811.82 -$7,060.97 $33,921.66 $24,144.77 $33,921.66 $0.00 $71,945.91 8.745%
SUM LOAN SUM DEPR
MARRAT = 12%
$0.00 $42,772.50
PWAT = -$8,790.32
BOOK VALUE
FWAT = -$12,349.77
$47,227.50
AWAT = -$3,659.84
IRRAT = 4.36%
ERRAT = 6.24%
PROBLEM 9.57
a AS SHOWN
b MARR= 12.00%
c LOAN RATE= 7.00%
d PROP CLASS= MACRS(5)
e TAX RATE= 36.00%
BASIS $180,000.00 LOAN PRINC $70,000.00 BTCF $40,000.00 TAX RATE 36.00%
EST SALV $30,000.00 LOAN PERIOD 6 USEFUL LIFE 4
MARRAT 12.00%
RCVD SALV $30,000.00 LOAN INT 7.00% PERIODS 4 PLAN 3
EOY BT&LCF PPMT PRINC REMAIN IPMT DWO BOOK VALUE TI T ATCF PWATCF ATCF+ ATCF- ATCF MACRS(5)
0 –$180,000.00 -$70,000.00 $70,000.00 $180,000.00 -$110,000.00 -$110,000.00 $0.00 $110,000.00 –$110,000.00
1 $40,000.00 $9,785.71 $60,214.29 $4,900.00 $36,000.00 $144,000.00 -$900.00 -$324.00 $25,638.29 $22,891.33 $25,638.29 $0.00 $0.00 20.00%
2 $40,000.00 $10,470.71 $49,743.59 $4,215.00 $57,600.00 $86,400.00 -$21,815.00 -$7,853.40 $33,167.69 $26,441.08 $33,167.69 $0.00 $0.00 32.00%
3 $40,000.00 $11,203.65 $38,539.93 $3,482.05 $34,560.00 $51,840.00 $1,957.95 $704.86 $24,609.43 $17,516.51 $24,609.43 $0.00 $0.00 19.20%
4 $70,000.00 $38,539.93 $0.00 $2,697.80 $10,368.00 $41,472.00 $15,462.20 $5,566.39 $23,195.88 $14,741.40 $23,195.88 $0.00 $128,383.96 5.76%
SUM LOAN SUM DEPR
MARRAT = 12%
$0.00 $138,528.00
PWAT = -$28,409.67 -$28,409.67
BOOK VALUE
FWAT = -$44,703.17
$41,472.00
AWAT = –$9,353.44
IRRAT = –1.28%
ERRAT = 3.94%
ERRAT =