1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Usimov [2.4K]
3 years ago
15

To finance some manufacturing tools it needs for the next 3 years, waldrop corporation is considering a leasing arrangement. the

tools will be obsolete and worthless after 3 years. the firm will depreciate the cost of the tools on a straight-line basis over their 3-year life. it can borrow $4,800,000, the purchase price, at 10% and buy the tools, or it can make 3 equal end-of-year lease payments of $2,140,000 each and lease them. the loan obtained from the bank is a 3-year simple interest loan, with interest paid at the end of the year. the firm's tax rate is 40%. annual maintenance costs associated with ownership are estimated at $240,000, but this cost would be borne by the lessor if it leases. what is the net advantage to leasing (nal), in thousands? (suggestion: delete 3 zeros from dollars and work in thousands.)
Business
1 answer:
KATRIN_1 [288]3 years ago
3 0
"The answer is $106".

After tax cost of debt               6%
Dep per year                          1600
Tax sav from dep                   640
cost of owning       0               1
interest                                  -480
tax saving                               192
maintence                                 -240
maintenece saving                     96
Depn tax saving                          640
loan repay
net cash cost                              208
PV cost of owning (6%)             -3474
cost of leasing
lease payment                           -2100
Tax savings from lease                840
net cash cost                           -1260
PV cost lease 6%                     -3368
PV cost own - Pv cost lease       106
You might be interested in
A professional theater company wants to hire a young actor to play an important part in a play. Many actors have expressed an in
SSSSS [86.1K]

Answer: C. An actor who comes from a respected talent agency.

Explanation:

Talent Agencies are professionals in the field. The people they send have been put through training programs that the Talent Agency knows will serve them well because they are in that same industry. For this reason, actors from Talent Agencies send the strongest signals.

Look at it this way, would you take investment advice from an investment banker or from an entrepreneur? Both could present very strong cases but the Investment Banker has expertise in the subject and is more likely to be picked.

It is the same here. The Talent Agency is believed to have expertise and so when they send someone, that person is considered first.

5 0
3 years ago
In 2012, a nation’s population was 10 million, its real GDP was 1.21 billion. By 2013, its the population had increased to 12 mi
julsineya [31]
No no it’s not going on
Yes yes I will
A
7 0
3 years ago
A spreadsheet is___.
Sliva [168]
An electronic document in which data is arranged in the rows and columns of a grid and can be manipulated and used in calculations.
Microsoft excel and google spreadsheet are examples of some of the most common platforms used.
7 0
3 years ago
the role of the develpoed nation in helping the developing nations for sustainable develpoment of natural resources???pls help.
tigry1 [53]

Answer:

Developed nations have an economic and moral responsability to help developing contries achieve sustainable development goals not only because developed nations have more money, but also because they are the main originators of climate change.

For this reason, developed nations should give funds to developing nations in order to fund projects such as solar, wind, geothermal, and nuclear power plants, and they should also provide technical assistance, since the population of developed nations tends to be more educated than that of developing nations.

7 0
2 years ago
Assume that a piece of land is currently valued at $50,000. If this piece of land is expected to appreciate at an annual rate of
Luda [366]

Answer:

The correct answer is $132,664.89.

Explanation:

According to the scenario, the given data are as follows:

Present value (PV) = $50,000

Rate of interest (r) = 5%

Time period (n) = 20 Years

So, we can calculate future value by using following formula:

Future value = PV × (1 + r)^(n)

= $50000 × ( 1 + 5% )^20

= $50000 × (1 + 0.05)^20

= $132,664.89

Hence, After 20 years land will be worth $132,664.89.

5 0
3 years ago
Other questions:
  • Suppose that Verizon Wireless has hired you as a consultant to determine what price it should set for calling services. Suppose
    12·1 answer
  • "A customer has an existing margin account and wants to write five covered calls against 500 shares of stock in the account. The
    6·1 answer
  • In order to increase usage of the family-oriented ski resort, its owner sent letters to several college fraternities inviting th
    12·2 answers
  • The deeds and actions of a producer indicate what kind of authority?
    8·1 answer
  • Bryant leased equipment that had a retail cash selling price of $690,000 and a useful life of six years with no residual value.
    7·1 answer
  • ABC Company began its operations on March 31, 2019. Projected manufacturing overhead costs for the first three months of busines
    15·1 answer
  • The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:________
    8·1 answer
  • Retro Rides, Incorporated, operates two divisions: (1) a Management Division that owns and manages classic automobile rentals in
    5·1 answer
  • What is procedural fairness with example
    12·1 answer
  • Marie and Ramesh form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corpora
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!