Data from problem 18-1 Reynolds Construction needs a piece of equipment that costs $200. Reynolds can either lease the equipment or borrow $200 from a local bank and buy the equipment. If the equipment is leased, the lease would not have to be capitalized. Reynolds?s balance sheet prior to the acquisition of the equipment is as follows: Current assets $300 Debt $400 Net fixed assets 500 Equity 400 Total assets $800 Total claims $800 THIS IS THE ACTUAL PROBLEM I NEED THE ANSWER TO: (18?2) Lease versus Buy Consider the data in Problem 18-1. Assume that Reynolds?s tax rate is 40% and that the equipment?s depreciation would be $100 per year. If the company leased the asset on a 2-year lease, the payment would be $110 at the beginning of each year. If Reynolds borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should Reynolds lease or buy the equipment? Please fill excel sheet under chapter 18-problem 2. Provide all documentation as to how the answer came about.

Unit 4 Problems: Submittions Template: Chapter 18th: Problem 2 Given Data Tax Rate: Depreciation per year: Lease Paument each year Bank Loan Rate: Step 1: Calculate the cost of owning ( Note: you will use the NPV forula in Excel) Rate (Discount Rate) Year 0 Year 1 Year 2 NPV (answer) Setp 2: Calculate the cost of leasing (Note: You will use the NVP formula in Excel) Rate(Discount Rate) Year 0 Year 1 NPV (answe) Shoulr Reymolds Lease or buy? Include an explanation of the pors and cons of leasing over ownership of an asset. Chapter 20- Problem 2 Given data: Stock Price Amount needed to raise Price of new Issue underwritters compensation: Beranek net per share: Berenek expenses: 25 20000000 22 5.00% 20.9 150000 (Note: input the correct data and use the appropriate formula in the answer cell) Answer Cell Include an explanation of a specific item, for example interes, floatation costs, call premium, of how to use refunding tools and techniques to minimizethe cost of capital