What is the present value of the lease payments

Assignment Help Financial Management

Reference no: EM13915482

Your landscaping company can lease a truck for $7,200 a year for 6 years. It can instead buy the truck for $35,000. The truck will be valueless after 6 years.

a. What is the present value of the lease payments, if the opportunity cost of capital is 7%?

Reference no: EM13915482

Questions Cloud

Decision making in groups and effective communication : You are a consultant hired to help improve the productivity of Celia Jane, a medium-sized furniture design firm. Celia Jane always kept up with the competition but now would like to gain some market share and expand its business.

Operating divisions-auto division and truck division : Sharp Motor Company has two operating divisions—an Auto Division and a Truck Division. The company has a cafeteria that serves the employees of both divisions. The costs of operating the cafeteria are budgeted at $78,000 per month plus $0.80 per meal..

Credit account titles are automatically indented : On July 1, 2014, Agincourt Inc. made two sales. It sold land having a fair value of $915,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,389,036. The land is carried on Agincourt’s books at a cost of $591,1..

Trade restrictions affect logistics firms directly : Trade restrictions affect logistics firms directly

What is the present value of the lease payments : Your landscaping company can lease a truck for $7,200 a year for 6 years. It can instead buy the truck for $35,000. The truck will be valueless after 6 years. What is the present value of the lease payments, if the opportunity cost of capital is 7%?

The following information pertains to mgm : The following information pertains to MGM Corp. at January 1, 2013:Common stock, $10 par, 20,000 shares authorized,

Describe change management : Write a 3 page, double-spaced essay: Change Management. Describe change management. What is the ultimate goal of change management

Assignment on network upgrade : Imagine that you are the administrator for a small accounting company, which currently employees 200 people. The CEO announces a merger that would double the number employees to 400. Your current network design is as follows:

Assume required rate of return on this bond : What is the value of a bond that has a par value of $1,000, a coupon rate of 10.40 percent (paid annually), and that matures in 18 years? Assume a required rate of return on this bond is 11.91 percent.

User Account

All Pages