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
melisa1 [442]
3 years ago
15

Dakota Trucking Company (DTC) is evaluating a potential lease for a truck with a 4-year life that costs $40,000 and falls into t

he MACRS 3-year class. If the firm borrows and buys the truck, the loan rate would be 10%. The cost of capital (WACC) for this company is also 10%. The truck will be used for 4 years, at the end of which time it will be sold at an estimated residual value of $10,000. The lease terms call for a $10,000 lease payment (4 payments total) at the beginning of each year. DTC's tax rate is 30%. Should the firm lease or buy? (Note: MACRS rates for Years 1 to 4 are 0.33, 0.45, 0.15, and 0.07.)

Business
1 answer:
Afina-wow [57]3 years ago
7 0

Answer:

The company should borrow or buy the truck as it is less costly than leasing.

Explanation:

Detailed solution is given below

You might be interested in
The Laffer curve shows the relationship between tax rates and ____________ and depicts the benefits of cutting taxes when tax ra
MrMuchimi

Answer: tax revenue

Explanation:

The Laffer Curve was developed by Arthur Laffer and it depicts the relationship that exists between the tax rates and tax revenue.which the government collects.

The curve is typically used to show that there can be an increase in the total revenue for an economy when the tax rate is reduced.

7 0
3 years ago
An airline has a marginal cost per passenger of $20 on a route from Minneapolis to Dallas. At the same time, the typical fare ch
luda_lava [24]

Answer:

The fixed costs are too high. The marginal cost generally represents variable costs and they might be very low, but if the fixed costs are simply too high, they will need to increase the price of the plane tickets in order to break even. The break even formula is calculated by dividing total fixed costs by marginal revenue (selling price - variable costs).

3 0
3 years ago
The acts of receiving shipments, breaking down shipments, repackaging shipments, and distributing components to a manufacturing
ehidna [41]

Answer: Cross docking

Explanation:

The cross docking is one of the logistics procedure in which the various types of goods and the services are directly distributed from supplier to the consumers.

The main aim of the cross docking process is that it helps in increase the efficiency in the supply chain and it is used for handling the inventory system.

It is the process in which the the shipment are received, repacking of the shipments and then it is supply to the customers by the distribution center.

Therefore, Cross docking is the correct answer.  

6 0
3 years ago
Listening to employee suggestions, gaining support for organizational objectives, and fostering an atmosphere of teamwork are al
Archy [21]

Answer:

Interpersonal and communication skills

7 0
4 years ago
You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $1,000 par value bonds have a quo
Dominik [7]

Solution:

a.

N I/Y PV PMT FV

10 × 2 10 / 2 CPT

PV −1,000.00 100 / 2 1,000

10%/2=5% *1000= 50

n=20

i=5%

pmt 50

fv 1000

Answer: $1,000.00

b.

N I/Y PV PMT FV

5 × 2 10 / 2 CPT

PV −1,000.00 100 / 2 1,000

n=8

pmt 50

i 5%

fv 1000

Answer: $1,000.00

a.

Appendix D

Present value of interest payments:

PVA = A × PVIFA (5%, 20)

= $50 × 12.462

= $623.10

Appendix B

Present value of principal payment at maturity:

PV = FV × PVIF (5%, 20)

= $1,000 × .377

= $377.00

Bond price = $623.10 + 377.00

= $1,000.10

b.

Appendix D

Present value of interest payments:

PVA = A × PVIFA (5%, 10)

= $50 × 7.722

= $386.10

Appendix B

Present value of principal payment at maturity:

PV = FV × PVIF (5%, 10)

= $1,000 × .614

= $614.00

Bond price = $386.10 + 614.00

= $1,000.10

6 0
3 years ago
Other questions:
  • Which of the following best explains the purpose of a demand schedule?
    13·1 answer
  • Given your understanding of the marketing discipline (analyzing the situation through the 3cs, developing marketing strategy thr
    15·1 answer
  • A marketing manager instructs his team to make 80 telephone calls to attempt to sell an insurance policy. The random variable in
    14·1 answer
  • Venzuela Company’s net income for 2020 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issue
    6·1 answer
  • Herb Kelleher, founder and long-time chief executive officer of Southwest Airlines, was known for inspiring and motivating his e
    15·1 answer
  • When a policy is surrendered for its cash value,?
    7·1 answer
  • Alan, an accountant in a law firm, is summarizing his company’s expenses and revenue in the form of an income statement. However
    14·2 answers
  • Globalization is the process of
    13·1 answer
  • The following are the transactions for the month of July.
    7·1 answer
  • Dnstrstdhfgjfuufuufdydydyufcjcjigjvcjfrdgddfhh
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!