To finance some manufacturing tools it needs for the next 3 years, waldrop corporation is considering a leasing arrangement. the tools will be obsolete and worthless after 3 years. the firm will depreciate the cost of the tools on a straight-line basis over their 3-year life. it can borrow $4,800,000, the purchase price, at 10% and buy the tools, or it can make 3 equal end-of-year lease payments of $2,140,000 each and lease them. the loan obtained from the bank is a 3-year simple interest loan, with interest paid at the end of the year. the firm's tax rate is 40%. annual maintenance costs associated with ownership are estimated at $240,000, but this cost would be borne by the lessor if it leases. what is the net advantage to leasing (nal), in thousands? (suggestion: delete 3 zeros from dollars and work in thousands.)
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “To finance some manufacturing tools it needs for the next 3 years, waldrop corporation is considering a leasing arrangement. the tools will ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect.
Answers (1)
Credit sales are recorded by crediting an accounts receivable.
Answers (1)
According to Opinion Dynamics Poll, 54% of adult men and 33% of adult women believe in aliens. It is known that 48% of the population are men. For the probability mass function obtained, what is the cumulative distribution function F (x) ?
Answers (1)
Remsco has taxable income of $61,000 and a charitable contribution limit modified taxable income of $72,500. Its charitable contributions for the year were $7,540.
Answers (1)
On July 31, Potter Co. purchased 2,000 shares of GigaTech stock for $16,000. GigaTech has 100,000 shares currently outstanding. This is the company's first and only stock investment.
Answers (2)
New Questions in Business
Lorna Perry, who works in a financial firm in Michigan, is required to calculate a large number of clients' accounts daily. She needs to tally figures and check accuracy at a high speed.
Answers (1)
The traits, skills, experience, knowledge, and other features necessary for job success are called internships. job qualifications. job salaries. health benefits.
Answers (1)
hich of the following is consistent with relationship marketing? Maintaining transactional relationships with customers Working with buyers to determine their individual needs Developing market share through mass media advertising Focusing more on
Answers (1)
The following investment opportunities are available to an investment center manager: Project Initial Investment Annual Earnings A $ 800,000 $ 90,000 B 100,000 20,000 C 300,000 25,000 D 400,000 60,000 Required: a.
Answers (1)
Suppose that examination of a pro forma reveals that the fifth-year net operating income (NOI) for an income-producing property that you are analyzing is $913,058 (you can assume that this cash flow occurs at the end of the year).
Answers (1)