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The Wildcat Oil Company is trying to decide whether to lease or buy a new computer-assisted drilling system for its oil exploration business. Management has decided that it must use the system to stay competitive; it will provide $3.3 million in annual pretax cost savings. The system costs $10 million and will be depreciated straight-line to zero over its five-year life, after which it will be worthless. Wildcat's tax rate is 25 percent and the firm can borrow at 9 percent. Lambert Leasing Company has offered to lease the drilling equipment to Wildcat for payments of $2,180,000 per year. Lambert's policy is to require its lessees to make payments at the start of the year.
What is the NAL for Wildcat?
What is the maximum lease payment that would be acceptable to Wildcat?
Witten Entertainment is considering buying a machine that costs $552,000. The machine will be depreciated over five years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $127,000. The company can issue bonds at an interest rate of 6 percent. The corporate tax rate is 22 percent.
What is the NAL of the lease?
Using the company's financial statements, perform a complete 2-year financial statement analysis addressing liquidity, efficiency, debt, profitability, and market measures as well as a common-size income statement and balance sheet along with a pr..
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you find a certain stock that had returns of 4 percent -5 percent -15 percent and 16 percent for four of the last five
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A facility has an issue of 18 year old $1000 par value bonds that pay 7% interest, assume today's required rate of return on these bonds is 5%, how much would these bonds sell for today?
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Peter Lynchpin wants to sell you an investment contract that pays equal $12000 amounts at the end of each of the next 20 years.
A company has an EPS of $2.10, a book value per share of $21.00, and a market/book ratio of 3.3×. What is its P/E ratio?
explain how title insurance works. what risks does it cover? who pays and when? what common exceptions does it
Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $90,000 and will generate net cash inflows of $19,000 per year for 11 years. What is this project's..
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