USA Depreciation Problem


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Joined
Aug 26, 2020
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United States
Per my quick calculations my answer is 14.4%

The old equipment generates a gross profit of $35,150. The new equipment will generate $59,150 in income, and $1,200 in repairs costs and $12,000 in depreciation which means that in order to match the same gross profit of $35,150 the most you can spend on interest is $10,800. The loan principal is $75,000 and $10,800 divided by $75,000 = .144
 
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Joined
Sep 11, 2020
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Country
United States
Per my quick calculations my answer is 14.4%

The old equipment generates a gross profit of $35,150. The new equipment will generate $59,150 in income, and $1,200 in repairs costs and $12,000 in depreciation which means that in order to match the same gross profit of $35,150 the most you can spend on interest is $10,800. The loan principal is $75,000 and $10,800 divided by $75,000 = .144
Guaooo thks.... that’s the answer. Appreciate
 

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