All categories

3 years ago

Differential Analysis for a Lease or Buy Decision

Business

1 answer:

il63 [147K]3 years ago

4 0

Answer:

Lease Equipment $150,000

BUY EQUIPMENT$134,700

Differential Effects-$15,300

The company should choose BUY EQUIPMENT which is Alternative 2

Explanation:

Preparation of the differential analysis dated March 15 to determine whether Laredo Corporation should lease (Alternative 1) or purchase (Alternative 2) the equipment

Differential Analysis

Lease (Alt. 1) or Buy (Alt. 2) Equipment

March 15

Lease Equipment (Alternative 1); Buy Equipment

(Alternative 2); Differential Effects (Alternative 2)

Costs:

Purchase price $0 $120,000 $120,000

Freight and installation $0 $1,500 $1,500

Repair and maintenance (6 years) $0 $13,200.$13,200

($2,200*6=$13,200)

Lease (6 years) $150,000 $0 -$150,000

($25,000*6)

Total costs $150,000 $134,700 -$15,300

Based on the above calculation the company should choose BUY EQUIPMENT which is Alternative 2

You might be interested in

You are a supply chain manager at a UK firm. In 2010, a volcano broke out in Iceland, disrupting air travel across Europe. On th

grandymaker [24]

Answer:

Explanation below.

Explanation:

It should be understood that as a chain supply manager, your job is to continue to make supply available no matter what may.

At this instance, what happened that cut you off from your reliable Asian suppliers was not your fault at all, and the best thing is to start patronizing the local suppler until the predicament is resolved.

What is needed to be done, is to continually be in touch with the Asian suppliers, and keep assuring them of patronizing them again immediately the coast is clear.

5 0

3 years ago

A guest calls to make a reservation. She tells you her friend made a reservation for $315 versus the $350 you are quoting as a r

RideAnS [48]

<span>The situation should be handled by speaking in a calm, yet firm tone of voice. The customer should be told the rates for rooms at the hotel, as well as any charges that may occur for cancelling. If the customer still isn't satisfied, she should be transferred to the manager for further explanation.</span>

3 0

3 years ago

The expected average rate of return for a proposed investment of $5,330,000 in a fixed asset, using straight-line depreciation,

Nitella [24]

Answer:

The Expected Average Rate of Return for the proposed investment is 30%.

Explanation:

This can be calculated as follows:

Average Investment = (Initial Cost + Residual Value) / 2 = ($5,330,000 + $0) / 2 = $2,665,000

Expected average annual income = Expected total net income / Useful life = $15,990,000 / 20 = $799,500

Expected Average Rate of Return = Estimated Average Annual Income / Average Investment = $799,500 / $2,665,000 = 0.30, or 30%

3 0

3 years ago

A firm organized on the basis of retail customers and wholesale customers utilizes the concept of departmentalization by

lilavasa [31]

Answer:

Customer

Explanation:

In customer departmentalization, departments are basically separated from each other based on the types or groups of customers that needs to be handled or dealt with. For instance, customers can be classified under types such as, bulk purchasing or wholesale customers, retail customers, etc.

To handle them in a better way each group of customers needs different tactics and strategies. Therefore, customer deparmentalization serves the purpose of the firm that is organized on the basis of retail customers and wholesame customers.

3 0

4 years ago

An organization estimated that in a particular year the population of a country spent $10.4 trillion in personal consumption. T

navik [9.2K]

Answer:

The approximate annual per capita spending for personal consumption is $30,145 person per year

Explanation:

The formula to compute the approximate annual per capita spending for personal consumption is shown below:

= Total amount which country has spent in a particular year ÷ Total population

Since the population amount is 310 million and the total amount spent is $10.4 trillion

So, we have to convert the million to trillion

So, the revised population would be

= 345 ÷ $1000,000 = 0.000345 trillion

Now put these values to the above formula

So, the answer would be equal to

= $10.4 trillion ÷ 0.000345 trillion

= $30,145 person per year

8 0

4 years ago