A new 5-axis CNC machine can be bought for $3,000,000. The company is considering 3 means of buying the machine, a cash purchase or two types of loans. A 4 year loan is available at 5.2% interest with equal annual payments on a capital recovery with a return basis. A 5 year interest only loan is available which requires only interest payments for the first 4 years, and interest and principal at the end of the fifth year. The interest only loan is at 5.7%. Operating and maintenance costs are estimated at $125,000 for the first year, increasing at 8% per year. Using the MACRS for 5 years to calculate depreciation, determine the equivalent annual cash cost to the company for a 6 year study period using the three different payment options described above. The company is profitable and pays an annual income tax rate of 42%. Use a MARR of 16%. If the machine is sold exactly 3 years after its purchase for $900,000, what is the capital gain or loss on the sale of the machine?