A company is deciding whether to lease or buy a new truck. The truck can be leasedfor a 5-year period for $50,000 per year (due at the beginning of each year). The firmcan borrow at 8%. The company's marginal tax rate is 35% and CCA is 22%.Calculate the PV of Lease.Round the PV of Lease to 2 decimals (e.g 22.05), and the unit is $.Your Answer:Answerunits

Present value of annuity Annuity is a series of equal payments at equal interval. With cost of…

Answered: A company is deciding whether to lease…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A firm needs some machinery which it can lease from the manufacturer for a five-year period by making lease payments of $8,000 at the end of each month. If the interest rate for the firm is 8% p.a., with monthly compounding, the present value of the lease payments is closest to: O $394,547. $380,289. $383,300. O $470,547.
McGee Leasing leased a car to a customer. McGee will receive $300 a month,at the end of each month, for 36 months. Use the PV function in Excel® to calculate the asnwers to the following questions1. What is the present value of the lease if the annual interest rate in the lease is 18%?2. What is the present value of the lease if the car can likely be sold for $6,000 at the end ofthree years?
1. Suggest you are going to lease a car with an MSRP of $30 000. The manufacturer has set a residual of 60% for a 3-year lease. The dealer has agreed to a selling price of $28 000, and there's a rebate of $500 from the manufacturer. Also you will have a $1 700 advance payment and the lease carries an interest rate of 9% per year. How much would your monthly pretax lease paymentsbe? Manufacturer's Suggested Retail Price MSRP USD 30,000.00 Negotiated sales price NSP USD 28,000.00 Lease Term LT month 36.00 Residual persentage RP dec. 0.60 Advance payment AP USD 1,700.00 Rebate R USD 500.00 Interest Rate APR % 9.00 Calculate the following 1. Calculation of Depreciation fee: Net capitalized cost NCC USD 25,800.00 Residual Value RV USD 18,000.00 Depreciation over lease term Dt USD 7,800.00 Depreciation charge (monthly) D USD 216.67 2. Calculation of Finance fee (Rent charge): Money factor MF - 0.003750 Finance fee (monthly) F USD 164.25…
A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $49,000, there is no trade-in, and the down payment is $4,000. Find the monthly lease payment (in dollars). Assume that the residual value is 49% of the MSRP of $51,5000. Round your answer to the nearest cent.
You are interested in leasing a car for $425 per month, due at the beginning of each month. Using an interest rate of 4% annually, what is the present worth of a one-year lease for this car? a) Slove using Annual Worth b) Solve using Internal Rate of Return Excel is preferred
A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $48,000, there is no trade-in, and the down payment is $3,000. Find the monthly lease payment (in dollars). Assume that the residual value is 48% of the MSRP of $51,800.
Could you please help me with the following questions? Using a TVM solver could you answer this question. Suppose a new car with a purchase price of $25,150 can be bought or leased at an interest rate of 5.6%, compounded monthly for 48 months. The down payment on the purchase is 10% of the purchase price or $2,515, while the down payment on the lease is $1,040. The residual value for the lease is $14,750. There is a similar car on the lot that is two years old, selling for $17,500. The down payment required on the used car is $1,750. Determine the monthly payment for each of the three options if the terms of each loan are the same. Determine the total amount of interest paid on each loan. Determine the total amount paid for each of the three options, including principal, interest, and down payment.
You are going to lease a brand new car. The price of the car is $50,000. You intend to make a $4,500 down payment. The term of the lease is 24 months and the lease rate is 7.6% APR. The buyout for the lease is 40% of its purchase price. What are the monthly lease payments after tax? The tax rate is 9%. The after-tax monthly lease payments are $ (Round to the nearest cent as needed.) (...
Bisa is leasing a vehicle worth $20,000, with a down payment of $1000 and equal payments at the beginning of every two weeks for three years. What is the size of each lease payment if the cost of borrowing is 6.75% compounded monthly and the residual value is $10,500? The Textbook answer says $147.34........
Compute the interest paid on a 4-year lease for a $25,894 car if the annual rate of depreciation is 17% and the lease's annual interest rate is 3%. Round your answer to the nearest dollar.
Your firm is considering leasing a new computer. The lease lasts for 4 years. The lease calls for 5 payments of $450 per year with the first payment occurring immediately. The computer would cost $5,900 to buy and would be depreciated using the straight-line method to zero salvage over 4 years. The firm can borrow at a rate of 7%. The corporate tax rate is 21%. What is the NPV of the lease?
Shamma approaches Al-Meezan Islamic Bank to lease a car using an Ijara waIqtina contract ending in the ownership transferring to Shamma. The price of thecar is AED100,000. The lease period is 4 years, during which 40% of the value ofthe asset will be used up. The bank wants a profit rate of 7% in the lease contract.Calculate the monthly lease payment for the customer.Multi Line Text.

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