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- One Company has offered a small company two method by which to pay for some needed roof repairs. Method 1 involves a payment of $16500 as soon as the job done, i.e.,now. Method 2 allows the company to defer payment for 2 years, at which time a payment of $26400 would be required. If the interest rate is 12% per year, make your decision which method is better than another and why?Need answers ASAP... A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer?A// A civil engineer wants to invest $ 72000 in a new loader, if the income from temporary leasing of loader in expected to be 14000$ per year. The length of time required to recover the investment at an interest rate 14% per year in closet to?
- Your company is deciding between leasing or selling an older piece of equipment. Information related to the decision is provided below: Leasing the Equipment Book value: $82,000 Remaining useful life: 5 years Annual leasing revenue: $10,000 Expected annual repairs: $2,000 Legal fees: $1,000 Advertising fees: $500 Selling the Equipment Selling price: $21,000 Legal fees: $1,000 Advertising fees: $500 What is the differential profitability of leasing the equipment?Steven Appraisals is appraising a commercial office building for refinancing. The company is using the expected future revenue method of determining the value of the building today. Assume the building is fully leased and expected to remain that way. Annual rental revenue is $209000 per year. The expected life of the building is 20 years. Assuming an annual return of 13%, what is the current value of the office building? a. $1468173 b. $1350637 c. $4180000 d. $1541499 Note :- step by step answer requiredYou are hired as an analyst for Engro Corporation. During your first assignment, you are asked to perform a buy versus lease analysis on a newly developed machine. The machine cost Rs. 1,200,000 and if Engro decide to purchase it, a term loan can be obtained at a cost of 10%. The amount of the loan will be amortized in 4-year machine life (with the payments made at the end of each year). This is the special purpose machine and falls into MACRS 3-year class for depreciation purpose. The depreciation rates for this machine are 33%,45%,15%, and 7% for the next four years, respectively. The purchase of the machine will result in a maintenance cost of Rs. 25,000 payable at the beginning of each year. The residual salvage value of the machine is estimated to be Rs. 125,000 after its useful life of 4-years. Because of rapid changes in technology and uncertainty around residual value, a useful alternate is to arrange this machine through leasing. Orix leasing company has shown interest to give…
- You are hired as an analyst for Engro Corporation. During your first assignment, you are asked to perform a buy versus lease analysis on a newly developed machine. The machine cost Rs. 1,200,000 and if Engro decide to purchase it, a term loan can be obtained at a cost of 10%. The amount of the loan will be amortized in 4-year machine life (with the payments made at the end of each year). This is the special purpose machine and falls into MACRS 3-year class for depreciation purpose. The depreciation rates for this machine are 33%,45%,15%, and 7% for the next four years, respectively. The purchase of the machine will result in a maintenance cost of Rs. 25,000 payables at the beginning of each year. The residual salvage value of the machine is estimated to be Rs. 125,000 after its useful life of 4-years. Because of rapid changes in technology and uncertainty around residual value, a useful alternate is to arrange this machine through leasing. Orix leasing company has shown interest to…You are hired as an analyst for Engro Corporation. During your first assignment, you are asked to perform a buy versus lease analysis on a newly developed machine. The machine cost Rs. 1,200,000 and if Engro decide to purchase it, a term loan can be obtained at a cost of 10%. The amount of the loan will be amortized in 4-year machine life (with the payments made at the end of each year). This is the special purpose machine and falls into MACRS 3-year class for depreciation purpose. The depreciation rates for this machine are 33%,45%,15%, and 7% for the next four years, respectively. The purchase of the machine will result in a maintenance cost of Rs. 25,000 payable at the beginning of each year. The residual salvage value of the machine is estimated to be Rs. 125,000 after its useful life of 4-years. Because of rapid changes in technology and uncertainty around residual value, a useful alternate is to arrange this machine through leasing. Orix leasing company has shown interest to give…You are hired as an analyst for Engro Corporation. During your first assignment, you are asked to perform a buy versus lease analysis on a newly developed machine. The machine cost Rs. 1,200,000 and if Engro decide to purchase it, a term loan can be obtained at a cost of 10%. The amount of the loan will be amortized in 4-year machine life (with the payments made at the end of each year). This is the special purpose machine and falls into MACRS 3-year class for depreciation purpose. The depreciation rates for this machine are 33%,45%,15%, and 7% for the next four years, respectively. The purchase of the machine will result in a maintenance cost of Rs. 25,000 payable at the beginning of each year. The residual salvage value of the machine is estimated to be Rs. 125,000 after its useful life of 4-years. Because of rapid changes in technology and uncertainty around residual value, a useful alternate is to arrange this machine through leasing. Orix leasing company has shown interest to give…
- You are hired as an analyst for Engro Corporation. During your first assignment, you are asked to perform a buy versus lease analysis on a newly developed machine. The machine cost Rs. 1,200,000 and if Engro decide to purchase it, a term loan can be obtained at a cost of 10%. The amount of the loan will be amortized in 4-year machine life (with the payments made at the end of each year). This is the special purpose machine and falls into MACRS 3-year class for depreciation purpose. The depreciation rates for this machine are 33%,45%,15%, and 7% for the next four years, respectively. The purchase of the machine will result in a maintenance cost of Rs. 25,000 payable at the beginning of each year. The residual salvage value of the machine is estimated to be Rs. 125,000 after its useful life of 4-years. Because of rapid changes in technology and uncertainty around residual value, a useful alternate is to arrange this machine through leasing. Orix leasing company has shown interest to give…Company C is seeking for help to decide this option to choose to upgrade their current bottleneck equipment. There are two vendors and one rental option. The cost details are shown in the table below. Vender R 75000 28000 Option Initial Cost Annual Operation Cost Salvage Value 0 Estimated Life in Year 2 MARR = 10% per year compounded monthly. Vender T 125000 12000 30000 3 Rental 0 52000 0 Maximum 3 years 1. Select from the two sales vendors using the LCM and PW analysis. 2. Determine which of the three options is cheaper over a 3 year study period.You are equipping an office. The total office equipment will have a first cost of2.0Mand a sal-vage value of$200,000. You expect the equipment will last 10 years. Use a spreadsheet to compute the40%bonus depreciation with MACRS depreciation schedule.