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
if u were the professor wht your opinion about vincent mind stage

J inherited 30000 & decides to open a hair salon.make arrangements 1/4/1016 commits 10000 to the business Opens an a/c under j hair salon What will be the amount under capital in

The topic taken for this study is "FINANCIAL VIABILITY OF X BY APPLYING CREDIT SCORE MODEL".  The study has attempted to analyze the financial viability of the company by applyi

You have just taken out a $220,000 loan for your house at an APR of 7.5% and a 30-year term. Payments are to be made monthly . Two years from now, you refinance at an APR of 5.5%

Question 1: (a) What do you meant by the term ‘Life Insurance Contract'? (b) Many people prefer to choose Single life policies compared to Joint life policies. Why is t

Suppose an entrepreneur owns a firm which has two production opportunities. Technology A generates an output (net profit) of 10 in state 1, an output of 20 in state 2, and an outpu

risk structure of interest rates 1. Default risk 2. Liquidity 3. Income tax consideration 4. Expectations theory

Find the costs of financing for two schedules of monthly payments on a 25-year mortgage. The cash value of the house today is $500,000. You are paying monthly at a fixed rate of 6%

Taxation Position and Profitability & Liquidity Profitability and liquidity A company's capacity to pay dividend will be determined primarily with its capability to creat

What are the principles of multiunit finance?