What is the npv of the lease relative to the purchase

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Reference no: EM132015126

1. Hatwick Technology is considering leasing a new equipment. The lease lasts for 5 years. The lease calls for 5 payments of $10,200 per year with the first payment occurring immediately. The equipment would cost $44,000 to buy and would be straight-line depreciated to a zero salvage value over 5 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 6%. The corporate tax rate is 34%. What is the NPV of the lease relative to the purchase?

$1,120.00

-$526.34

-$857.15

-$1,475.28

$469.43

2. rf=0; (b). sigma_1y = $20. S0=100.( Do it in Excel)

2a. Calculate the delta of 3 month PUT with S0=100, while varying strike X from 80 to 120

2b. Calculate the delta of 12 month PUT with S0=100, while varying strike X from 80 to 120

2c. Calculate the delta of 3 month CALL with S0=100, while varying strike X from 80 to 120

2d. Calculate the delta of 12 month CALL with S0=100, while varying strike X from 80 to 120

2e. graph 2a and 2b in the same chart. y-axis is the delta and x-axis is the strike price.

2e. graph 2c and 2d in the same chart. y-axis is the delta and x-axis is the strike price.

Reference no: EM132015126

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