This lease is most likely an operating lease

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Reference no: EM132020343

1. ABC Inc. has just signed a lease agreement with XYZ Computers. ABC agreed to pay $10,000 per month for 24 months. The purchase price of the equipment is $200,000. According to the lease agreement, XYZ will pay property taxes and insurance on the equipment. This lease is most likely an operating lease.

True

False

2. For a project with an initial investment of $42,000 and cash inflows of $10,000 a year for six years, calculate NPV given a required return of 12%/year.

a. -$775

b. $1,699

c. -$347

d. -$1,205

e. -$886

Reference no: EM132020343

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