#### yamil1585

Hi guys. I am having doubts with this question. Studying for GC license..... I will be grateful

#### Attachments

• 118.8 KB Views: 41
• 154.3 KB Views: 41

#### UncleSam

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

#### yamil1585

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