Guideline lease agreement on laundry equipment

Assignment Help Financial Management

Reference no: EM132066480

Walton Nursing Home (WNH) is evaluating a guideline lease agreement on laundry equipment that costs $250,000 and falls into the MACRS three-year class. The home can borrow at an 8 percent rate on a four-year loan if WHN decided to borrow and buy rather than lease. The laundry equipment has a four-year economic life, and its estimated residual value is $50,000 at the end of Year 4. If WHN buys the equipment, it would purchase a maintenance contract which costs $5,000 per year, payable at the beginning of each year. The lease terms, which include maintenance, call for a $71,000 lease payment at the beginning of each year. WNH's tax rate is 40 percent. Should the home lease or buy?

Reference no: EM132066480

Questions Cloud

Discuss global and glocal strategies of given areas : Your Marketing Director has been invited to make a presentation to a group of domestic consumer marketers. The conference, ‘Going global, acting local.

What are stocks and bond : What are Stocks and Bonds? Describe how you could estimate their values. If you are investing in the stock market, which would you invest in and why?

What is the value of share of gillette stock : what is the value of a share of Gillette stock if the? firm's equity cost of capital is 7.9 % ?? The value of? Gillette's stock is ?$nothing . ?(Round to the ne

How managed care is working for other countries : Managed care does exist in Saudi Arabia but is not as prevalent as other countries. Draft a paper analyzing the need for or against manage care in Saudi Arabia.

Guideline lease agreement on laundry equipment : Walton Nursing Home (WNH) is evaluating a guideline lease agreement on laundry equipment that costs $250,000 and falls into the MACRS three-year class.

Compare possible components of background checks : Write a 650- to 700-word paper in which you complete the following: Compare at least three possible components of background checks.

Capital budgeting criteria-mutually exclusive projects : Capital budgeting criteria: mutually exclusive projects Project S costs $11,000 and its expected cash flows would be $5,500 per year for 5 years.

Discuss the types of beverage establishments in detail : Retail Beverage-Operation Design Complete an essay by choosing one of the types of beverage establishments (Wines, Beer, Spirits, Cocktails).

What kind of people work in google : Describe googl's culture. How were the managers viewed before project oxygen? What kind of people work in google?

User Account

All Pages