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  3. 4. an asset was acquired by hugo and sons with the

4. An asset was acquired by Hugo and Sons with the following values First cost-...

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Accounting

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4. An asset was acquired by Hugo and Sons with the following values First cost- $400,000, depreciable life 3 years, and an estimated salvage value of $80,000. Initial investment is borrowed at 10% per year with repayment of an equal uniform amounts at the end of each year in 2 years. Expected gross income and expenses are $200,000 and $40,000 at year 1, respectively and both increase by $10,000 per year subsequently. The asset is actually salvaged after 3 years for $500,000. a What will be the size of each payment for the $400,000 debt? How much of each payment is interest and how much of each payment is principal Ci.e., towards the $400,000 debt? t ayment/yr Interest/yr Principal Payment/yr Remaining principal balance b) What will be the depreciation amount and book value for this investment for years l through 3 using the MACRS Depreciation method? IT EBV ED

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