What is the equivalent annual cost of buying

Assignment Help Finance Basics
Reference no: EM133112999

Deutsche Transport can lease a truck for four years at a cost of €39,000 annually. It can instead buy a truck at a cost of €89,000, with annual maintenance expenses of €19,000. The truck will be sold at the end of four years for €25,000. Ignore taxes.

a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 11%? (Do not round intermediate calculations. Enter your answer in Euro. Round your answer to the nearest whole number.)

b. Which is the better option: leasing or buying?

Reference no: EM133112999

Questions Cloud

What is the balance on the original loan : B1. What is the balance on the original loan at the end of year 6?
What will company report as wage expense : What will Company report as wage expense when it records the payment of wages on Friday, 1/3/Year4? Input this as a positive number
What are the balances for the machine account : After the adjustments are recorded and posted at December 31, Year6, what are the balances for the Machine account and the Accumulated Depreciation account
Calculate the probability of joint default : A portfolio consists of two bonds. The bond value, default probability, and recovery rate are USD $1,000,000,1%, and 60% for one bond, and USD $400,000, 5%, and
What is the equivalent annual cost of buying : Deutsche Transport can lease a truck for four years at a cost of €39,000 annually. It can instead buy a truck at a cost of €89,000, with annual maintenance expe
What is the risk-free rate : Stock M has an expected return of 18 percent and a beta of 1.7. Stock N has an expected return of 9 percent and a beta of 0.8. Both stocks have the same reward-
What is the ticker symbol of the company : Select a Fortune 500 Company from one of the following industries:Retail
Prepare the journal entry to record the redemption : Prepare the journal entry to record the redemption of the bonds assuming they were redeemed at 100 on January 1, 2023
Tremendous opportunity to be heard : The second environment is one that did confront the brutal facts, where people had a tremendous opportunity to be heard.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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