New Equipment Cost: $ 2,500,000.00 Cost of Financing: 6.50% Lease term: 4 Years

1. Determine the monthly payment for the new lease for the new equipment?

2. Assuming that other existing variable and fixed costs carryover for the next 4 years and that this is an

operating lease, what is the net present value of the equipment assuming a 12% discount rate?

The FMV of selling the equipment is $500,000 at the end of the lease.

(Variable Costs : 46,825 Fixed Costs: 106,242.10)