Determining the approximate annual cost

Reference no: EM13784532

Jonas Inc. is trying to decide whether to lease or purchase a piece of equipment needed for the next ten years. The equipment would cost $45,000 to purchase, and maintenance costs would be $5,000 per year. After ten years, Jonas estimates it could sell the equipment for $20,000. If Jonas leased the equipment, it would pay a set annual fee that would include all maintenance costs. Jonas has determined after a net present value analysis that at its hurdle rate of 10%, it would be better off by $5,700 if it buys the equipment. What would the approximate annual cost be if Jonas were to lease the equipment?

a. $9,000
b. $7,000
c. $12,000
d. $13,250

Reference no: EM13784532

Questions Cloud

Decision to pursue an education in business or finance : Explain how you made the decision to pursue an education in Business or Finance. Include a summary of expenses related to that decision, such as: cost of tuition, cost of books, the interest you may pay on any loans, and any other associated expen..

Discuss vendor relations in lean systems : Discuss vendor relations in lean systems in terms of the following issues. Why are they important? How do they tend to differ from the more adversarial relations of the past? Why might suppliers be hesitant about JIT purchasing?

Attempt to be an effective counselor : How will George's usual ways of dealing with people affect his attempt to be an effective counselor? Analyze each of the characteristics mentioned above (judgmental, narrow-minded, guarded/defensive, and opinionated).

Customer centered philosophy issue : Does the mission statement explain how the organization closes the gap between customer needs and the products or services offered?

Determining the approximate annual cost : Jonas has determined after a net present value analysis that at its hurdle rate of 10%, it would be better off by $5,700 if it buys the equipment. What would the approximate annual cost be if Jonas were to lease the equipment?

Create the tables create the primary keys add dml statements : Create the tables Create the primary keys Create the foreign keys Add DML statements to: Add data of 1 customer who buys from the company Provide the DML to add 1 employee who interacts with customers Give DML to change data of the employee

Advantages and disadvantages to measure performance : What are the advantages and disadvantages to measure performance? Briefly explain your organization's performance measurement system or that of an organization with which you are familiar. Does it work? Why, or why not

Implications of the internal and external analyses : Impart your understanding and the organizational implications of the Internal and External Analyses!

Explain its organizational implications : Provide a numerical example of a basic/key financial ratio and explain its organizational implications!

User Account

All Pages