How much should the company make the annual lease

Assignment Help Accounting Basics
Reference no: EM133090592

Question - An Ottawa based company, Taggurt Construction Corporation plans to lease a $820,000 bulldozer to the LRT Corporation. The lease will be for 12 years. Lease payments are payable at the beginning of the year. Use Excel functions calculate the following:

a. If Taggurt desires a 14 percent return on its investment, how much should the company make the annual lease payments for?

b. How much would the lease payments be if the payments are to be made at the end of the year rather than at t.

c. Explain why the amount calculated in a) above differs to the amount in calculated in b.

d. If Taggurt is able to generate $125,000 in immediate tax shield benefits on the bulldozer purchased for the lease arrangement and will pass the benefits along to the LRT Corporation in the form of lower lease payments, how much should the revised lease payments be? Assume that Taggurt still wants a 14 percent return on the 12-year lease.

Reference no: EM133090592

Questions Cloud

Explain any extenuating circumstances : Provide an opportunity to explain any extenuating circumstances that you feel could add value to your application.
Supervisor can enhance feedback : What are 5 ways that a supervisor can enhance feedback?
Business intelligence assets to the board : How to apply the DIKW triangle to support the use of business intelligence assets to the board.
Providing context and supporting context through citations : After completing the assigned reading WRITE YOUR OWN discussion board topic for your classmates.
How much should the company make the annual lease : If Taggurt desires a 14 percent return on its investment, how much should the company make the annual lease payments for
Different strategies to defend against global giants : According to Thompson et al. (2022), a local company can apply different strategies to defend against global giants.
What payment must be made on june : An invoice for $2600.00, dated June 2, with terms 3/10, 1/30, n/60, was received on June 10. What payment must be made on June 11 to reduce the debt to $1250
Crucial negotiation-human dynamics that drive negotiation : Describe the positions, interests, and BATNAs. What are the human dynamics that drive the negotiation?
Effectiveness change during and after the pandemic : The world has seen significant changes due to COVID-19 and quarantine. Identify an organization that has been significantly impacted by the coronavirus.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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