Bank loan payment than the lease payment

Reference no: EM13746716

Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards, is considering a 5-year, $6,000,000 bank loan to finance service equipment. The loan has an interest rate of 10% and would be amortized over 5 years, with 5 end-of-year payments. Sutton can also lease the equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the bank loan payment than the lease payment? Note: Subtract the loan payment from the lease payment.

Reference no: EM13746716

Questions Cloud

What would be the present value of her deferred annuity : Mary will make one more $500 deposit one year from today. If Mary closes the account right after she makes the last deposit, how much will this account be worth at that time?

Intellectual standards and describe for each scenario : You are deployed in a country. A raid went wrong, and your squad opened fire on several innocent people. Your commander asks you and the rest of the squad to make it look like they opened fire up on you first. How would you respond?

Determining the rate of return : You just paid $351,000 for a policy that will pay you and your heirs $12,300 a year forever. What rate of return are you earning on this policy?

In what ways the cold war affected domestic politics in usa : In What ways the cold war affected domestic politics in america and contributed to the suppression of the progressive wing of the democratic Party and made it even more difficult for progressives.

Bank loan payment than the lease payment : How much larger or smaller is the bank loan payment than the lease payment? Note: Subtract the loan payment from the lease payment.

Discuss what impact did the changes in the economy : In at least 200 words, discuss what impact did the changes in the economy have on the institution of slavery and the lives of the slaves?

How events during war of 1812 help to move american economy : how did the events during the War of 1812 help to move the American economy in new directions after peace was restored?

Determining the level of deposits : Assume a bank has $5 million in deposit and $1 million in vault cash. If the bank holds $1 million in excess reserves and the required reserves ratio is 8%, what level of deposits are being held?

Macroeconomics principles or concepts from the simulation : How may you apply what you learned about supply and demand from the simulation to your workplace or your understanding of a real-world product with which you are familiar?

User Account

All Pages