Should the imaging system be purchased or leased

Assignment Help Business Economics

Reference no: EM131166431

Fidelity Life Insurance has a document imaging system that needs replacement. A local salesperson quoted a cost of $10, 000 with an estimated salvage of $900 after 5 or more years. If the system is expected to save $1700 per year in clerical time, find the payback time at 8% per year. As a practice, the office manager purchases equipment only when the payback is less than 6 years. Otherwise, he prefers to lease. Should the imaging system be purchased or leased?

Reference no: EM131166431

Questions Cloud

The annual and effective annual interest rates of your loan : Your car breaks down. a good friend of yours offers to loan you $1,000 so you can have the car repaired and returned home. your friend will charge you only $50 interest for the loan, but you have to pay it back within one month. what are the annual a..

What kind of closure procedures are used : Interview a project manager who works for an organization that implements multiple projects. Ask the manager what kind of closure procedures are used to complete a project and whether lessons learned are used

Fixed salary was causing her top manager to shirk on the job : Recently, the owner of a Trader Joe’s franchise decided to change how she compensated her top manager. Last year, she paid him a fixed salary of $60,000 and her store made $130,000 in profits (not counting payment to her top manager). She suspected t..

Long-term relationship with family farms : HomeGrown is a small restaurant that specializes in serving local fruits, vegetables and meats. The company has chosen to enter into a long-term relationship with Family Farms, a local farming operation. The two parties have decided to enter into a l..

Should the imaging system be purchased or leased : Fidelity Life Insurance has a document imaging system that needs replacement. A local salesperson quoted a cost of $10, 000 with an estimated salvage of $900 after 5 or more years. If the system is expected to save $1700 per year in clerical time, fi..

Determine the best time to replace the machine : A special purpose machine can be purchased for $90,000. The operating & maintenance expenses for each of the next five years and the market value at the end of each of the next five years are shown below. If the MARR is 15% per year compounded yearly..

Piece of equipment that was purchased : A piece of equipment that was purchased for $25,000 five years ago has a current book value of $6,000. This equipment can currently be sold for $ 5,000. The salvage value at the end of the study period of 5 years is expected to be $5,000. If the befo..

Type of machine would be needed indefinitely : A machine was purchased five years ago at a cost of $60,000. It currently has a market value of $10,000. The current book value is $15,000. It can function for another 2 years and will have an annual operating expense of $10,000 next year and $12,000..

Why do oligopolistic markets tend to exhibit price stability : What programs are dealing effectively with this population? Why do oligopolistic markets tend to exhibit price stability, and if this is the case, how do firms in these markets compete (illustrating with a couple of real-life examples)?

User Account

All Pages