Question
Hello! i need help with calculation of cash flows both purchase & lease. WCF, Inc has decided to purchase new equipment at a cost of
Hello!
i need help with calculation of cash flows both purchase & lease.
WCF, Inc has decided to purchase new equipment at a cost of $3.2 million. The equipment will be straight-line depreciated over 4 years and at that time it will be worthless. The tax rate is 35 percent.
Your bank has offered to finance the entire $3.2 million.The repayment plan will be $800,000 per year with an interest charge of 9 percent on the outstanding balance of the loan at the beginning of each year.Principal + interest payments are due at the end of each year. FCW Leasing has offered a lease payment of $950,000 per year due at the beginning of each of the years.
thank you!
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