Stanley Inc. must purchase $6,000,000 worth of service equipment and is weighing the merits of leasing the equipment or purchasi
ng. The company has a zero tax rate due to tax loss carry-forwards, and is considering a 5-year, bank loan to finance the equipment. The loan has an interest rate of 10% and would be amortized over 5 years, with 5 end-of-year payments. Stanley can also lease the equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the bank loan payment than the lease payment? (Hint: remember back to our bond pricing concepts and calculate the payment of the bond vs. the lease payment; loan payment - lease payment )
The probability that the dealer will be fined is 0.0948 To find p(a <= Z <= b) = F(b) - F(a) P(X < 20) = (20 - 30.5)/3.4489 = -10.5/3.4489 = -3.0444 = P(Z < -3.0444) from standard normal table = 0.00117 P(X < 26) = (26 - 30.5)/3.4489 = -4.5/3.4489 = -1.3048 = P(Z < -1.3048) From standard normal table = 0.09599 P(20 < x < 26) = 0.09599 - 0.00117 = 0.0948
The Microsoft Excel OR function returns TRUE if any of the conditions are TRUE. Otherwise, it returns FALSE. The OR function is a built-in function in Excel that is categorized as a Logical Function
