A firm takes out a $250,000 loan to purchase an asset. It makes yearly payments of $25,000 plus interest at a 8% annual rate over 10 years. The asset brings in BTCF of $50,000 each year. The asset is purchased for the loan amount and is depreciated via the straight-line method over the term of the loan. The marginal tax rate is 34%.

What is profit in the last year of the loan?

Answer rating: 100% (QA)

profit in the last year of the loan Before Tax Cash Flow eac... View the full answer