Cutter Ltd. is planning to invest $150,000 in an automated screw-cutting machine to enhance its current
operations. Due to a lack of internal funds, its management is planning to borrow 60% of the investment from a
local bank at an interest rate of 10% payable in 5 equal payments. What is the principal payment in year 2 that
should be included in the after-tax cash flow analysis?

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The Answer of Cutter Ltd. is planning to invest $150,000 in an automated screw-cutting machine to enhance its current
operations. Due to a lack of internal funds, its management is planning to borrow 60% of the investment from a
local bank at an interest rate of 10% payable in 5 equal payments. What is the principal payment in year 2 that
should be included in the after-tax cash flow analysis?