Software package tied to satellite global positioning system

Assignment Help Financial Management

Reference no: EM13918518

Joshua Trucking has chosen a new software package tied to satellite global positioning system (GPS), in order to monitor its fleet. The software will be outdated after three years and replaced. The software vendor has given Joshua Trucking the choice of buying the software for $65,000 or leasing it for an annual payment of $25,000. To attract customers, the GPS vendor allows lease payments at year-end. The firm has decided to purchase the vendor’s service contract under either option. Assume that depreciation is on a straight-line basis, Joshua Trucking’s cost of obtaining funds is nine percent, and the firm is in the 34 percent tax bracket. Should it borrow and buy or lease the GPS software? Show calculations.

Reference no: EM13918518

Questions Cloud

Determining the statement of cash flows : 1. The statement of cash flows is used for _____.

What is the expected price of the stock : A share of common stock has just paid a dividend of $2.00 that is D0= $2.00. If the expected long-run constant growth rate for this stock is 5 percent, and if investors require an 8 percent rate of return (Rs=8%), what is the expected price of the st..

Company purchased a building : The company purchased a building by issuing a four-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence.

Status of brand insistence : A product which has achieved the status of brand insistence: A. Is likely to spend more than its competitors in order to maintain its status. B. Has achieved a monopoly position with its consumers. C. Has a distinctive? Identity character?..

Software package tied to satellite global positioning system : Joshua Trucking has chosen a new software package tied to satellite global positioning system (GPS), in order to monitor its fleet. The software will be outdated after three years and replaced.

Determine the amount of net income that would be reported : Winters Co. purchased $48,000 of marketable securities on March 1, 2013. On the company's fiscal year closing date, December 31, 2013, the securities had a market value of $27,000. During 2013, Winters Co. recognized $12,000 of revenue and $5,000 of ..

Considering has the same systematic risk level : Assume the coffee shop project that you are considering has the same systematic risk level as investing in Starbuck’s stock. Starbuck’s stock has a beta of 1.25, the current risk-free rate is 3%, and the current market premium is 7%.

Statement of cash flows : 1.The statement of cash flows is used for _____. 2. Nonoperating items on the income statement _____.

New seven-octave voice emulation implant : Project Evaluation [LO1] Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 73,000 2 86,000 3 100,000 4 95,000 5 76,000 Production of the implants will require $1,520,000 in ne..

User Account

All Pages