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Jane Tucker, a financial analyst at Industrious Corporation, is analyzing the possibility of leasing a new Sun Enterprise 10000 server, which is needed for the
Jane Tucker, a financial analyst at Industrious Corporation, is analyzing the possibility of leasing a new Sun Enterprise 10000 server, which is needed for the expansion plans of the data center. The systems manager responsible for the purchase has provided a quote from Sun Microsystems for $927,000 if the hardware is purchased. The system must be delivered by 03/15/2022 and installed on 03/22/2022. Tucker receives proposals from two leasing companies: one for 24 months and one for 36 months. She is also able to find out that the companies use equity insertion rates of 10 percent and 5 percent, as well as financing rates of 8 percent and 8.5 percent, respectively. 1. What is the amount of the two- and three-year equity insertion for the leasing companies (in USD)? 2. Which lease is preferable for Industrious Corporation, assuming there are no cash flow problems and the company wants the lowest total cost? 3. What would the lease payments be in advance (paid at the beginning of the month) for the two- and three-year leases? 4. What would be the two- and three-year lease payments in arrears (paid at the end of the month)? 5. What are the two- and three-year lease rate factors
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