Depreciation is by double declining balance

Assignment Help Business Economics
Reference no: EM132264190

Your company is considering the acquisition of a computer system for $22,000 for a five-year project. You may either buy the computer with borrowed money at 8%, with a single repayment at the end of 5 years, or lease it with yearly payments of $7500, $6500, $5500, $4500, and $3500 at the end of years 1 through 5. The salvage value is $2000, and the expected yearly benefits are $6000. Your corporate income tax rate is 50%, depreciation is by double declining balance, and discount rate is 8%.

a) Should you buy or lease?

b) Does your answer change if your discount rate is 5%? What if it is 15%?

Reference no: EM132264190

Questions Cloud

Parks theory addresses issues of upward mobility : The Voting Rights Act of 1965 required that the same standards be used to register all citizens in federal, state, and local elections.
Asymmetric information and the credit market : Sean is a rice farmer. To grow rice, he must buy seeds, which cost $100. Rice production is risky. If he gets a GOOD harvest
How do self-directed team compare to decision and task teams : Describe the significance of self-directed teams and the meaning of autonomous/semi-autonomous work teams. How do self-directed teams compare to decision teams.
What is charline expected utility : What is Charline's expected utility if she buys the insurance and opens the business?
Depreciation is by double declining balance : Your company is considering the acquisition of a computer system for $22,000 for a five-year project. You may either buy the computer with borrowed money
Discuss the various intervention and prevention efforts : Discuss the various intervention and prevention efforts that focus on intimate partner violence victims, including evidence of their effectiveness.
Discuss potential measures that will use to attract consumer : Web site promotion isn't just randomly advertising your website to an ambiguous crowd of people. Instead it focuses on locating the places on the internet.
What about a financial account surplus : Is it possible (theoretically) for every country to have a current account surplus in a given year? What about a financial account surplus? Why?
What is charline expected income : What is Charline's expected income if she opens her business?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd