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**Unformatted text preview: **ade at the end of each year and that the firm is in the 40%
tax bracket. Assume that no purchase option exists.
Firm Annual lease payment A $100,000 B 80,000 Term of lease
4 years
14 C 16–2 8 60,000 25 E LG2 150,000 D 20,000 10 Loan interest For each of the loan amounts, interest rates, annual payments,
and loan terms shown in the following table, calculate the annual interest paid
each year over the term of the loan, assuming that the payments are made at the
end of each year.
Loan Amount Interest rate Annual payment A $14,000 B 17,500 12 10% $ 4,416 Term
4 years 10,355 2 C 16–3 13 1,017 3 49,000 14 14,273 5 E LG2 2,400 D 26,500 16 7,191 6 Loan payments and interest Schuyler Company wishes to purchase an asset
costing $117,000. The full amount needed to finance the asset can be borrowed 702 PART 6 Special Topics in Managerial Finance at 14% interest. The terms of the loan require equal end-of-year payments for
the next 6 years. Determine the total annual loan payment, and break it into the
amount of interest and the amount of prin...

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