OWNERSHIP, Corporate Finance

YOU company has decided to acquire a piece of equipment and is consi or leasing the asset that you plan to use for 4 years. you have the following: Purchase price:$10million Deperciation: 4 year, straight line Expected salvge value:$2 million yearly lease payment(made at the beginning of the year):$2.5 million tax rate: 35% cost of equity:10% cost of Debt 6.15% debt/equity Ration:1/2
what is the cost of ownership?
what is the cost of leasing?
should the company buy or lease the equipment?
how sensitive is your decision to the salvage value?
Posted Date: 12/13/2012 9:15:20 PM | Location : United States







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