Net Present Value of Leasing Assignment

You have just been offered a contract worth $1,04 million per year for 5 years. However, to take the contract, you will need to purchase some new equipment Your discount rate for this project is 11.6%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive NPV?

The most you can pay for the equipment and achieve the 116% annual return is $1 million (Round to two decimal places.)

 You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease the equipment to you for $9,900 per year i you sign a guaranteed 5 year lease the lease is paid at the end of each year). The company would also maintain the equipment for you as part of the lease Alternatively, you could buy and maintain the equipment yoursell. The cash flows from doing so are listed below (the equipment has an economic life of 5 years). If your discount rate is 7.1%, what should you do?

Year o – 540,600 Year 1 – $2,100 Year 2 – $2,100 Year 3 -$2,100 Year 4 — $2,100 Year 5 -$2,100

The net present value of the leasing alternative is $ (Round to the nearest dollar.) Get Finance homework help today

Order a unique copy of this paper
(550 words)

Approximate price: $22

Our Basic features
  • Free title page and bibliography
  • Plagiarism-free guarantee
  • Unlimited revisions
  • Money-back guarantee
  • 24/7 support
Our Options
  • Writer’s samples
  • Expert Proofreading
  • Overnight delivery
  • Part-by-part delivery
  • Copies of used sources
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

AcademicWritingCompany guarantees

Our customer is the center of what we do and thus we offer 100% original essays..
By ordering our essays, you are guaranteed the best quality through our qualified experts.All your information and everything that you do on our website is kept completely confidential.

Money-back guarantee

Academicwritingcompany.com always strives to give you the best of its services. As a custom essay writing service, we are 100% sure of our services. That is why we ensure that our guarantee of money-back stands, always

Read more

Zero-plagiarism tolerance guarantee

The paper that you order at academicwritingcompany.com is 100% original. We ensure that regardless of the position you are, be it with urgent deadlines or hard essays, we give you a paper that is free of plagiarism. We even check our orders with the most advanced anti-plagiarism software in the industry.

Read more

Free-revision guarantee

The Academicwritingcompany.com thrives on excellence and thus we help ensure the Customer’s total satisfaction with the completed Order.To do so, we provide a Free Revision policy as a courtesy service. To receive free revision the Academic writing Company requires that the you provide the request within Fifteen (14) days since the completion date and within a period of thirty (30) days for dissertations and research papers.

Read more

Privacy and Security policy

With Academicwritingcompan.com, your privacy is the most important aspect. First, the academic writing company will never resell your personal information, which include credit cards, to any third party. Not even your lecturer on institution will know that you bought an essay from our academic writing company.

Read more

Adherence to requirements guarantee

The academic writing company writers know that following essay instructions is the most important part of academic writing. The expert writers will, therefore, work extra hard to ensure that they cooperate with all the requirements without fail. We also count on you to help us provide a better academic paper.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2020 at 10:52 AM
Total price:
$26
The price is based on these factors:
Customer Academic level
Number of pages required
Urgency of paper