What is the present value of the lease payments

Assignment Help Financial Management

Reference no: EM13917985

Your landscaping company can lease a truck for $8,900 a year for 6 years. It can instead buy the truck for $45,000. The truck will be valueless after 6 years. What is the present value of the lease payments if the opportunity cost of capital is 7%? Is it cheaper to buy or lease?

Reference no: EM13917985

Questions Cloud

The returns from an asset are normally distributed : Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 17.5 percent and the standard deviation of those stocks in this period was 43.89 percent. What is the approximate prob..

Follow for the long-term change : Imagine that you are an executive for XYZ, Inc., a high-end retail chain that sells luxury watches, jewelry, and hand bags. You've just been put in charge of the company's first international expansion, opening a store in Shanghai, China.

Problem regarding the discipline of science : 3. The scientific method depends on 4. Which statement is true about the discipline of science?

What is the expected profit for retailer and manufacturer : Consider a manufacturer selling DVDs to a retailer for $6 per DVD .The production cost of each DVD is $1 and the retailer prices each DVD at $10 .Retail demand for DVDs is normally distributed , with a mean of 1000 and standard deviation of 300. what..

What is the present value of the lease payments : Your landscaping company can lease a truck for $8,900 a year for 6 years. It can instead buy the truck for $45,000. The truck will be valueless after 6 years. What is the present value of the lease payments if the opportunity cost of capital is 7%? I..

How do consumers use these indicators as part of qi process : What is the difference between performance measurement and quality improvement processes? What types of care or service does your chosen organization focus on?

Updating its current manual accounting system : Briarcrest Condiments NPV, Archer Daniels Midland NPV, Bell Mountain Vineyards NPV, Chip's Home Brew Whiskey Free Cash Flow FCF change with price increase , and Capital Co WACC

Costs do not change with the capital structure : Joe's Carwash has $4 billion in debt and $2 billion in equity. The firm’s cost of debt of 3.3 percent and a cost of equity of 14.4 percent (assume that these costs do not change with the capital structure). The tax rate is 35%. What is the firm’s wei..

Marketing decision makers in a firm : Marketing decision makers in a firm must constantly monitor competitors' activities - their products, prices, distribution, and promotional effort.

User Account

All Pages