User Account

All Pages

Prepare net advantage to leasing analysis of the investment

Assignment Help Other Subject
Reference no: EM132193506

Assignment: Case Study - Canada Hardware

It is January 1st, 2018. You are a senior analyst at Canada Hardware Inc. (CHI), one of the top hardware, sports, and apparel providers in Canada with hundreds of stores across Canada. The CEO of Canada Hardware, Tony Stark, has reached out to you to look at two options regarding an investment, building on your analysis from Assignment 1 and Assignment 2.

Purpose

Under this case approach, you will demonstrate your ability to undertake a detailed analysis to evaluate the buy versus lease options for an investment proposal, on a qualitative and quantitative basis. You will also be required to calculate the weighted average cost of capital (WACC). A supplementary scenario analysis of leasing options is required.

How to Proceed

1. Create a title page with your purchase versus lease report name and author identification.

2. Explain the advantages and disadvantages of leasing, including the possible reasons, right or wrong, that would make a company lease an asset (from the lessor and lessee perspective).

3. Calculate the weighted average cost of capital (WACC) to use in your net advantage to leasing (NAL) analysis, rounding to the nearest one tenth of a percent.

4. Prepare your Net Advantage to Leasing analysis of the investment using the WACC as the discount rate. In addition, determine the impacts of the sensitivity analysis in the case, including

a. changes in payments from beginning of period to end;

b. changes in salvage value;

c. security deposit; and

d. the break-even lease payment.

5. Explain and evaluate if the investment should be purchased or leased, depending on the different scenarios analyzed.

6. Determine the classification of the lease option being considered, and indicate what the effect would be on the statement of financial position.

Format for Submission

Your report narratives may be done in Word or Excel, but calculations and tables of values must be prepared in Excel with the amounts derived from actual formulas that use your variables, rounded to four (4) decimals or lower.

The Excel tab worksheet must be print and presentation ready, formatted to print in 2 to 3 pages without page fragmentation of equations or tables between pages.

It is permissible to break your report down using the questions listed above as headings.

Attachment:- Assignment.rar

Verified Expert

This assignment deals with financial planning and calculation of Accounts and thereby choosing the option between renting and leasing. For the closure of this assignment it is necessary to have an expert understanding on capital and discounted capita

Reference no: EM132193506

Questions Cloud

How do you feel about tests in general : How do you feel about tests in general? Are you able to see tests as an opportunity to create your mastery of a subject? Why or why not?
Consequently it often becomes major target of cost reduction : The supply chain is often one of the greatest sources of cost for companies and consequently it often becomes a major target of cost reduction.
Analyze some problems that have affected critical thinking : How have you used critical thinking to improve the quality of your decisions and your strategies for problem solving? Analyze some problems that have affected.
How will you measure the effectiveness of your plan : Do you believe that there should be a limitation on the violent video games that children are permitted to play?
Prepare net advantage to leasing analysis of the investment : FINC 0300 Financial Management - Calculate the weighted average cost of capital (WACC) to use in your net advantage to leasing (NAL) analysis, rounding
Summarize the definition of a gang used by us department : Summarize the definition of a gang used by the U.S. Department of Justice, and then invent a fictional character and explain.
Explain the different types of coatings : Aluminum is widely used in a plenty of industrial applications such as constructions, electrical engineering, transport and especially in aircraft industry.
Some methods it has used to reduce supply chain costs : Discuss in detail some methods it has used to reduce supply chain costs and what results were achieved;
How does text relate to a specific literary movement : Comparison ex :"While the robot in the original Lost in Space TV show was a benign sidekick who always had Will Robinson's back, the reboot version in 2018.

Reviews

len2193506

12/14/2018 1:02:35 AM

Q5 Evaluation of Leasing Options Marks Student Recommendation for original option - lease or buy 2 Recommendation for scenarios: Change in payments 2 Changes in salvage value 2 Security deposit impact 2 Q6 Lease Classifcation Marks Student Determines correct leasing classification 4 Discusses impact on financial statements 4 Total 100 0

len2193506

12/14/2018 1:02:20 AM

Q4 Financial Forecast Marks Initial Analysis WACC utilized as discount rate 2 Appropriate year term applied 2 Correct use of initial investment 2 After-tax leasing payments calculated 2 Present value of after-tax leasing payments 2 Tax Shield calculation 6 Present value of Salvage value 2 Lease payments at beginning of period 2 Scenario Analysis A. Change in payments from beginning to end 4 B. Changes in Salvage Value 4 C. Impact of Security Deposit with end payments 4 D. Breakeven lease payment 4

len2193506

12/14/2018 1:02:11 AM

Q3 WACC Calculation Marks Weighted Cost of Equity ROE calculation 2 Retention calculation 2 Growth Calculation 2 Dividend/Stock calculation 2 Calculation of $ amount of Common Equity 2 Calculation of weight in capital of Common Equity 2 Weighted Cost of Debt After-tax cost of debt 2 Calculation of weight in capital of Debt 2 Weighted Cost of Preferred Equity Cost of Preferred Stock 2 Calculation of weight in capital of Preferred Stock 2

len2193506

12/14/2018 1:02:04 AM

Grading You will be assessed in accordance with the following rubric: Q1 Title Page, Readability, Format, Spelling and Grammar Marks Student Title Page, Readability, Format, Spelling & Grammar 12 Q2 Qualitative Discussion of Leasing vs. Purchasing Marks Student Advantages vs. Disadvantages 4 Reasons for Lessor to lease (at least three) 4 Reasons for Lessee to lease (at least three) 4

len2193506

12/14/2018 1:01:53 AM

Format for Submission Your report narratives may be done in Word or Excel, but calculations and tables of values must be prepared in Excel with the amounts derived from actual formulas that use your variables, rounded to four (4) decimals or lower. The Excel tab worksheet must be print and presentation ready, formatted to print in 2 to 3 pages without page fragmentation of equations or tables between pages. It is permissible to break your report down using the questions listed above as headings. Submit your report file(s) into the Assignment 3: Case Study dropbox on UM Learn. Your assignment must be submitted by the deadline date found in the course schedule provided in the Course Outline.

Write a Review

Other Subject Questions & Answers

  Cross-cultural opportunities and conflicts in canada

Short Paper on Cross-cultural Opportunities and Conflicts in Canada.

  Sociology theory questions

Sociology are very fundamental in nature. Role strain and role constraint speak about the duties and responsibilities of the roles of people in society or in a group. A short theory about Darwin and Moths is also answered.

  A book review on unfaithful angels

This review will help the reader understand the social work profession through different concepts giving the glimpse of why the social work profession might have drifted away from its original purpose of serving the poor.

  Disorder paper: schizophrenia

Schizophrenia does not really have just one single cause. It is a possibility that this disorder could be inherited but not all doctors are sure.

  Individual assignment: two models handout and rubric

Individual Assignment : Two Models Handout and Rubric,    This paper will allow you to understand and evaluate two vastly different organizational models and to effectively communicate their differences.

  Developing strategic intent for toyota

The following report includes the description about the organization, its strategies, industry analysis in which it operates and its position in the industry.

  Gasoline powered passenger vehicles

In this study, we examine how gasoline price volatility and income of the consumers impacts consumer's demand for gasoline.

  An aspect of poverty in canada

Economics thesis undergrad 4th year paper to write. it should be about 22 pages in length, literature review, economic analysis and then data or cost benefit analysis.

  Ngn customer satisfaction qos indicator for 3g services

The paper aims to highlight the global trends in countries and regions where 3G has already been introduced and propose an implementation plan to the telecom operators of developing countries.

  Prepare a power point presentation

Prepare the power point presentation for the case: Santa Fe Independent School District

  Information literacy is important in this environment

Information literacy is critically important in this contemporary environment

  Associative property of multiplication

Write a definition for associative property of multiplication.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd