Net advantage to leasing, Finance Basics

1. Biily Mays , Inc, (BMC) is interested in acquiring a 1 million pre to print and circulate its meages. The press has 8 years useful life at the end of which its expected to be 90,000. The Shamvow Leaing Inc. I willing to lease such a press t for 8 lease payments of 174,000 to made at t0 - t7 . If BMC decided to borrow the 1 million it could do so from Dole State bank for 8 years at 23.35 % . If BMC's tax rate is 40% and it uses straight -line depreciation, how would it finance the press ?

Calculate the NAL.

Question 2:

Mazza and Banks, Inc is in the process of deciding if it should purchase or lease equipment which cost 21 million. If they decide to purchase or will be by borrowing the needed amount at 13 %

Salvage expected = 1 million

life = 7 years

Dep = 30% 20% 14% 9% 9% 9% 9%

ITC = 4%

COC = 18%

Effective Tax Rate = 30.77

Lease payment = 3.9 million at t0 t1 t3 t4 t5 t6

Compute the NAL should they lease or purchase?

Posted Date: 2/22/2013 2:15:53 AM | Location : United States







Related Discussions:- Net advantage to leasing, Assignment Help, Ask Question on Net advantage to leasing, Get Answer, Expert's Help, Net advantage to leasing Discussions

Write discussion on Net advantage to leasing
Your posts are moderated
Related Questions
Application of Discriminant Analysis Application of Discriminant Analysis to the Selection of Applicants, Discriminative analysis is a statistical model such can be used to ac

whom do you think rajendra should eat with and why

Download a set of financial statements "Creative Technology Ltd" From that set of Financial Statements. IN YOUR OWN WORDS, understand what the main revenue  streams of the business

Assignment Gary and Beth have accepted the asset allocation that you have given them, but are now looking to you to give them some advice on what stocks they should purchase. R

1. The Marlin Company operates 50 weeks a year, and its cost of goods sold last year was $1,500,000. The firm carries six items in inventory: three raw materials, two work-in-proce

(a) State the most appropriate drivers for the following direct expenses: (i) New business administration department's salary costs (ii) Medical examinations for temporary life

why prospective buyers need to see accounting information

What are the Types of orders (i) Spot Delivery: Spot delivery means delivery and payment on the same day as date of the contract or on the next day. (ii) Hand Delivery:

Struggling with your final year projects, terms paper writing, research paper writing, thesis writing, engineering and programming projects? Experts are available 24x7 to help you

Example of Theoretical Value As a result of the purchase of an asset, the income stream will rise by of £1,000 per annum for 25 years.  By assuming a discount rate of 20 perce