What is net benefit to you of buying the device

Assignment Help Financial Management
Reference no: EM131985068

You are signed up for Comcast internet service. This service requires a physical device, a cable modem, to connect you to the provider's internet service. You have two options:

1. buy the cable modem on the internet, this will cost about $100

2. rent the cable modem from the provider, this will cost about $9/month.

Assume the relevant investment rate of return is 0.7% APR on your money (this is petty cash, and would just be sitting in your high-interest savings account at best). Assume the lifetime of the device is 4 years.

What is net benefit to you of buying the device as compared to renting it?

Hint: find the present value of all the estimated rent payments for the lifetime of the device. compare to the present value of buying it outright. the 'benefit' may be positive or negative, depending on whether you give up more present-wealth renting or buying.

Reference no: EM131985068

Questions Cloud

Topic for an essay or final essay : Which strategy works best for you when you are trying to zero in on a topic for an essay or final essay?
The amount of money in your savings account will be closest : Immediately after your grandparents make the deposit on your 18th birthday, the amount of money in your savings account will be closest to?
List two examples of hardware features that are used : List two examples of hardware features that are used to help the OS perform its work. What are the advantages and disadvantages of relying on the hardware?
Describe of the three conclusions : In The Time Machine, the Time Traveller comes to three different conclusions about how Eloi society functions. Describe each of the three conclusions.
What is net benefit to you of buying the device : You are signed up for Comcast internet service. This service requires a physical device, a cable modem, to connect you to the provider's internet service.
How zyng soc can be used to accomplish a high-level design : List at least 3 advantage of implementing selected portions of a complex design in software. Explain how Zyng SoC can be used to accomplish a high-level design.
Should simple simons enter the loan agreement : Should Simple Simon's enter the loan agreement with the bank and begin taking the discount?
How much collection float does the firm currently have : If the firm's opportunity cost is 12?%, would it be economically advisable for the firm to pay an annual fee of $16,300 for a lockbox system to reduce.
Types of villain''s binary : One, there are villains having evil motives thus do bad things and the 2ndvillain who have good motives but do bad things?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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