A company is deciding whether to lease or buy new equipment that can be purchased for $30,000.
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Question:
A company is deciding whether to lease or buy new equipment that can be purchased for $30,000. If purchased, the equipment will need to be serviced at the end of each year. Consider the following information:
- PVCCATS = $9,000
- PV of Lease Payments Tax Shield = $39,000
- PV of Salvage Value = $3,000
- PV of Lease Payments Before-tax = $18,000
- PV of Annual Service Costs After-tax = $5,000
Based on the above information, what is the present value of buying?(Do not round intermediate calculations.Round the final answer to 2 decimal places.Omit any commas and the $ sign in your response.For example, an answer of$1,000.50 should be entered as 1000.50.)
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