Should company accept the lease offer or buy the equipment

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Problem 1: National carton Industry company (NCI) is considering leasing an equipment from Pal-lease, or buy the equipment directly from a supplier at $120,000 cash payment. The lease contract will be for the next 10 years , with an annual lease payment of $15000 due at the beginning of each of the next 10 years. The lease contract includes that the NCI company should buy the equipment at the end of the leasing period (after 10 years) for $25000. As a financial manager for NCI company, should your company accept the lease offer or buy the equipment if the discount rate is 8% a year.

Reference no: EM132844214

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