Question

311.000 the end of the year the besedo 14. 00 h the first Alates 15.000 and is expected to in ne w 21.000 the end of each your for years and then have a payment due dately a. if the organi s ot pay income and show whether the onthouder purchase the coment b. If the late is thought to be worth only say, 517,000 per you to the organimation, what is the better conc e sion? Cok the icon to view the rest and any for d e compounding w i per year The All of purchaung the other s o und to en The A n gebote und to the Cho the correcta What is the trend OA Do Nothing OB Purchase OC Lease b. The The Wo purchasing the the s u o und to the rest nd the world Choose th e What is the con OB. Purch OC. Do Nothing INS Type here to search O te m@

Answer 1

cost of cathe =$55000 net cash inflowes for the next three years = $21000 : market value after 3 years = $11,000. NPV =- 55000 to NPV B6000 + 21000 + 21000 A 21000 1.09 1.092 1.093 3-55000 + 2.0 (+ hon + iba =) = -55000 + 2,000 ( --Cine) op -ibada 1.09 =-55000 + 21000 2 1.09 1.09 = -$1842.84. 10.097 or $1-1843)- to the ne ho have $. of the equipment is leased, leasing cost = $24000 / year [beginning on and not inflows remain the same at $2,000 / year NPV 421000 -24 000 7 .092 1.092 24000 + 21000 - 24000 1 1.09 1.09 + 21000 1.093

-240001 tuba ) + 2,000(1ba logat.com) = -24000/1-6.09.). + 21000/1-6.0m) 3) " 7.09 T-109 11.09 = -66218.67 + 53157.19 = -13061.482 or $1-13061) -to the nearest & Because, both investment plans yield negative NP vs, the organization should neither lease not purchase equipment. ie. (Do Nothing .. Syoanned with cmScanner