A firm can lease a truck for 5 years at a cost of $45,000 annually. It...

A firm can lease a truck for 5 years at a cost of $45,000 annually. It can instead buy a truck at a cost of $95,000, with annual maintenance expenses of $25,000. The truck will be sold at the end of 5 years for $35,000. The cost of capital is 15%. What is the EAC of Purchase?

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A firm can lease a truck for 5 years at a cost of $42,000 annually. It...

A firm can lease a truck for 5 years at a cost of $42,000 annually. It can instead buy a truck at a cost of $92,000, with annual maintenance expenses of $22,000. The truck will be sold at the end of 5 years for $32,000. a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 12%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Which is the...

Exercise #4: A firm can lease a truck for 5 years at a cost of $45,000...

Exercise #4: A firm can lease a truck for 5 years at a cost of $45,000 annually. It can instead buy a truck at a cost of $95,000, with annual maintenance expenses of $25,000. The truck will be sold at the end of 5 years for $35,000. The cost of capital is 15%. Which is a better option? A. EAC of Lease = [11] B. PV of all Costs of Purchase = [12] C. EAC of Purchase = [13] D....

A firm can lease a truck for 4 years at a cost of $36,000 annually. It...

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A firm can lease a truck for 4 years at a cost of $41,000 annually. It...

A firm can lease a truck for 4 years at a cost of $41,000 annually. It can instead buy a truck at a cost of $91,000, with annual maintenance expenses of $21,000. The truck will be sold at the end of 4 years for $31,000. a. Calculate present value if the discount rate is 10%

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An asset has a first cost of $45,000, a recovery period of 5 years, and a $3000 salvage value. Use the DDB depreciation method (making sure that last book value equals the salvage value), and calculate the present worth of depreciation at i = 18% per year.

Consider the following terms of a lease. 1. The lease term is 5 years. The lease...

Consider the following terms of a lease. 1. The lease term is 5 years. The lease is noncancelable and requires equal payments of $50,000 at the beginning of each year, beginning January 1, 2019. 2. The leased asset is a standard piece of equipment. 3. The cost, and fair value, of the equipment to Lessor at the inception of the lease is $350,000. The equipment has an estimated economic life of 10 years and has a zero estimated residual value...

Doris is leasing a truck whose yearly rental is $5,189. The lease term is 3 years....

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On January 2, 2015, Mullins Company purchased a delivery truck for $45,000 cash. The truck had...

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Your firm is considering leasing a new computer. The lease lasts for 4 years. The lease...

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Your firm is considering leasing a new computer. The lease lasts for 8 years. The lease...

Your firm is considering leasing a new computer. The lease lasts for 8 years. The lease calls for 8 payments of $8,000 per year with the first payment occurring immediately. The computer would cost $50,000 to buy and would be straight-line depreciated to a zero salvage value over 8 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 5%. The corporate tax rate is 34%. What is the NPV of...

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