User Account

All Pages

International leasing call for a payment

Assignment Help Business Management
Reference no: EM131466370

Treadmill Trucking Co., is negotiating a lease for five new tractor/trailer rigs with Leasing International. Treadmill has received its best offer from Betterbilt Trucks for a total price of $900,000.

The terms of the lease offered by International Leasing call for a payment of $190,000 at the beginning of each year of the 5-year lease. As an alternative to leasing, the firm can borrow from a large insurance company and buy the trucks.

The $900,000 would be borrowed on an amortized term loan at a 10% interest rate for 5 years. The trucks fall into the MACRS 5-year class and have an expected residual value of $90,000. Maintenance costs would be included in the lease.

If the trucks are owned, a maintenance contract would be purchased at the beginning of each year for $8,000 per year. Treadmill plans to buy a new fleet of trucks at the end of the fifth year. Treadmill Trucking has a total tax rate of 20%.

1. Should the firm purchase or lease?

2. Determine the PV of both.

3. Find the NAL

Reference no: EM131466370

Questions Cloud

Find the maximum interval time for transmitting node : Show that for unslotted CSMA/CD, the maximum interval of time over which a transmitting node can hear a collision is 2ß.
Essay- impact of social media on contemporary communication : HC1021 Interpersonal & E-Communication Assignment. You are required to write an essay on "The impact of social media on contemporary business communication."
Rules of conduct for professional accountants : Explain how Certified Public Accountants are different from other professionals and examine the role of a code of professional conduct in encouraging CPAs ethical behaviour.
Budgeting tools utilized by both government types : Discuss the budgeting tools utilized by both government types. Discuss the impact of market inefficiencies on both government types.
International leasing call for a payment : The terms of the lease offered by International Leasing call for a payment of $190,000 at the beginning of each year of the 5-year lease.
Annual rate compounded monthly : You plan to retire with $800,000 in 20 years. How much should you deposit each month into an account that pays 9% annual rate compounded monthly?
Find the throughput for the given assumptions : Consider an unslotted CSMA/CD system in which the propagation delay is negligible compared to the time ß required for a node to detect that the channel is idle.
After-tax cost of debt capital for bubbles champagne : Assume that the firm has only one issue of five-year bonds outstanding. The bonds make semiannual coupon payments and the marginal tax rate is 30 percent.
The great majority of homeless single mothers are : Homeless shelters are very nicely equipped to serve families, and often set up different rules for families in order to accommodate them.

Reviews

Write a Review

Business Management Questions & Answers

  Using the balanced scorecard as a control system

In this week's 250-word post discuss the researcher's findings that scorecards had varying success depending upon the skill level of the employees. Include your thoughts about how you could apply these findings at your workplace. Consider the impa..

  Formal career development policies and programs

Should organizations adopt formal career development policies and programs? How do these programs affect their ability to be flexibile in terms of staffing? How do they influence their ability to recruit employees?

  Most current results of fortune magazine

Review the most current results of FORTUNE Magazine's annual ranking of America's "100 Best Companies to Work For." Explore the website of at least three of the companies noted. Develop a two- to three- page paper that addresses the following:

  Influence and effective leadershipexplain what is the

influence and effective leadershipexplain what is the relationship between influence and effective leadership and how

  Tagistan a new country in asia the gov­ernment of tagistan

International Diversified Corporation (IDC) owns assets in Tagistan, a new country in Asia. The gov­ernment of Tagistan wants to nationalize all assets owned by foreign firms and investors. What can IDC do? Can it at least obtain payment for the asse..

  Miscommunication issues in business1- when you get

miscommunication issues in business1- when you get interrupted or cut off this can lead to frustration but also

  Develop a newly acquired local workforce

How should a company evaluate and develop a newly acquired local workforce?

  How do you know if a product is elastic or inelastic

How do you know if a product is elastic or inelastic? For example an European vacation and steak.

  Compute the upper value limit of the confidence interval

Compute the upper value (limit) of the confidence interval to estimate the population proportion if the sample size

  Use of strong cryptographic products

Strong cryptographic items are not permitted to export to certain nations in several nations, what are the pros and cons of the commercial use of strong cryptographic items?

  Offerings or expanded customer base

How did you SWOT analysis help you determine the goal and how to accomplish it during the next two years. 5. What did you learn from this exercise that you can apply to your professional career/experiences. Write a 3 to 4 page paper

  Do you consider yourself handicapped in any way

Do you consider yourself handicapped in any way? Is there a history of chronic illness in your family? Are you planning to start a family soon?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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