Your landscaping company can lease a truck for $7,000 a year for 5 years. It can...
|
Your landscaping company can lease a truck for $7,000 a year for 5 years. It can instead buy the truck for $30,000. The truck will be valueless after 5 years. |
| a. |
What is the present value of the lease payments, if the opportunity cost of capital is 6%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Present value | $ |
| b. | Is it cheaper to buy or lease? |
|
Homework Answers
a.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=7000[1-(1.06)^-5]/0.06
=7000*4.21236379
=$29486.55(Approx).
b.Hence it is cheaper to lease the truck having lower present value.
Add Answer to:
Your landscaping company can lease a truck for $7,000 a year for
5 years. It can...
Your landscaping company can lease a truck for $7,000 a year (paid at year-end) for 5...
Your landscaping company can lease a truck for $7,000 a year (paid at year-end) for 5 years. It can instead buy the truck for $30,000. The truck will be valueless after 5 years. The interest rate your company can earn on its funds is 6%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is it cheaper to buy or lease? c. What is the...
Your landscaping company can lease a truck for $7,700 a year for 7 years. It can...
Your landscaping company can lease a truck for $7,700 a year for 7 years. It can instead buy the truck for $40,000. The truck will be valueless after 7 years. a.What is the present value of the lease payments, if the opportunity cost of capital is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)Present value $ b. Is it cheaper to buy or lease?BuyLease
Computational Your landscaping company can lease a truck for $7,100 a year for 7 years. It...
Computational Your landscaping company can lease a truck for $7,100 a year for 7 years. It can Instead buy the truck for $38,000. The truck will be valueless after 7 years. a. What is the present value of the lease payments, if the opportunity cost of capital is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b. Is it cheaper to buy or lease? Lease Buy
Your landscaping company can lease a truck for $8,100 a year (paid at year-end) for 7...
Your landscaping company can lease a truck for $8,100 a year (paid at year-end) for 7 years. It can instead buy the truck for $43,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is it cheaper to buy or lease? c. What is the...
Your landscaping company can lease a truck for $7,700 a year (paid at year-end) for 7...
Your landscaping company can lease a truck for $7,700 a year (paid at year-end) for 7 years. It can instead buy the truck for $41,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value of lease Present value of b. Is it cheaper to...
please answer all question with details for full review ! thanks. Problem 5-34 Annuity Due (L03)...
please answer all question with details for full review !
thanks.
Problem 5-34 Annuity Due (L03) Your landscaping company can lease a truck for $8,800 a year (paid at year-end) for 5 years. It can instead buy the truck for $38.000 The truck will be valueless after 5 years. The interest rate your company can earn on its funds is 6%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer...
A firm can lease a truck for 4 years at a cost of $30,000 annually. It...
A firm can lease a truck for 4 years at a cost of $30,000 annually. It can instead buy a truck at a cost of $80,000, with annual maintenance expenses of $10,000. The truck will be sold at the end of 4 years for $20,000. a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%? b. Which is the better option: leasing or buying?
Question 4 A firm can lease a truck for 4 years at a cost of $30,000...
Question 4 A firm can lease a truck for 4 years at a cost of $30,000 annually. It can instead buy a truck at a cost of $80,000, with annual maintenance expenses of $10,000. The truck will be sold at the end of 4 years for $20,000. Which is the better option if the discount rate is 10%? (Please solve with EAA)
Your company needs a new corporate jet for 5 years. You can either buy or lease...
Your company needs a new corporate jet for 5 years. You can either buy or lease it. If you lease it, you need to make a lease payment at the beginning of each year. All prices are in $ million. A B 1 Price of jet 16 2 Resale value after 5 years 8 3 Annual lease payment 1.6 4 Number of lease payments 5 5 Interest rate 12% Part 1 What is the net advantage to leasing, i.e., the...
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery...
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4,000 (paid at the beginning of each month). Your firm can borrow at 7% APR with quarterly compounding. a. Calculate the effective annual rate on your firm's borrowings. b....
Computational Your landscaping company can lease a truck for $7,100 a year for 7 years. It can Instead buy the truck for $38,000. The truck will be valueless after 7 years. a. What is the present value of the lease payments, if the opportunity cost of capital is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b. Is it cheaper to buy or lease? Lease Buy
Your landscaping company can lease a truck for $7,700 a year (paid at year-end) for 7 years. It can instead buy the truck for $41,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value of lease Present value of b. Is it cheaper to...
please answer all question with details for full review !
thanks.
Problem 5-34 Annuity Due (L03) Your landscaping company can lease a truck for $8,800 a year (paid at year-end) for 5 years. It can instead buy the truck for $38.000 The truck will be valueless after 5 years. The interest rate your company can earn on its funds is 6%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer...
Most questions answered within 3 hours.
-
A 7.55 g sample of an aqueous solution of
hydrochloric acid contains an unknown amount of...
asked 13 seconds ago -
Why would the following user group need accounting information
related to a business? Support your answers...
asked 2 minutes ago -
4. How much work is it to lift a 25 kg sack of cement vertically
4.3...
asked 3 minutes ago -
Questions:(to
be answered within the video)
Write a C++ program
with the following specifications:
1.
Create...
asked 7 minutes ago -
Write the mechanism for the reaction involving [emim][Br] and
lithium bis(trifluoromethylsulfonyl)imide.
asked 24 minutes ago -
The half life of a specific Tc-99m is 6 hours. How much of an
192 mg...
asked 32 minutes ago -
If you have 35.0g of Na and 100.0g of Cl2, what is the
maximum amount of...
asked 35 minutes ago -
Assume that adults have IQ scores that are normally distributed
with a mean of 96.8 and...
asked 34 minutes ago -
If a product or other segment of a business is generating a
loss, it is erroneous...
asked 38 minutes ago -
I need help writing c++ code to make this program.
1. Define a function that can...
asked 39 minutes ago -
Problem #5
A communications cable is 2.00 km long and consists of two
parallel wires separated...
asked 1 hour ago -
​Cranium, Inc., purchases term papers from an overseas supplier
under a continuous review system. The average...
asked 4 hours ago