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Quantum ' R Us has a physics research lab which would like to use a specialized machine for its quantum computers research program. The company
Quantum R Us has a physics research lab which would like to use a specialized machine for its quantum computers research program. The company will either need to lease the machine for the lab or it will buy the machine for the lab. Which one is better? Here's what's known about the machine and about the Quantum R Us company: Quantum R Us's pretax borrowing rate is per year. Quantum R Us pays a tax rate on its corporate taxable income. The machine for the research lab would cost $ to buy. It depreciates straightline to zero over its year economic life. After that, the lab's research project would end, and the machine will have no selling value. If the machine for the research lab is leased, Quantum R Us would need to pay $ at the end of every year in pretax lease payments, for years.CHAPTER the lab. Which one is better? Here's what's known about the machine and about the Quantum R Us company: Quantum R Us's pretax borrowing rate is per year. Quantum R Us pays a tax rate on its corporate taxable income. If the machine for the research lab is leased, Quantum R Us would need to pay $ at the end of every year in pretax lease payments, for years. Calculate the following: Each year, Quantum R Us would need to make a $ Select lease payment after taxes. That's if the machine is leased. equal Select Select As part of this valuation analysis, the appropriate discount rate for these cash flows would equal Select Based on the above, the calculations show that Quantum R Us's estimated net advantage to leasing, or NAL ie the NPV of leasing instead of buying is Select Select In addition no math!: In general, if Quantum R Us's calculated NAL is positive, then it should he machine. And in this case, in order for Quantum R Us to be indifferent between leasing and purchasing the machine, the lease payment would have to In general, if Quantum R Us's calculated NAL is negative, then the other company that would be leasing the machine to Quantum R Us would to sign the lease agreement with Quantum R Us
Quantum R Us has a physics research lab which would like to use a specialized machine for its quantum computers research program. The company will either need to lease the machine for the lab or it will buy the machine for the lab. Which one is better? Here's what's known about the machine and about the Quantum R Us company:
Quantum R Us's pretax borrowing rate is per year.
Quantum R Us pays a tax rate on its corporate taxable income.
The machine for the research lab would cost $ to buy. It depreciates straightline to zero over its year economic life. After that, the lab's research project would end, and the machine will have no selling value.
If the machine for the research lab is leased, Quantum R Us would need to pay $ at the end of every year in pretax lease payments, for years.CHAPTER
the lab. Which one is better? Here's what's known about the machine and about the Quantum R Us company:
Quantum R Us's pretax borrowing rate is per year.
Quantum R Us pays a tax rate on its corporate taxable income.
If the machine for the research lab is leased, Quantum R Us would need to pay $ at the end of every year in pretax lease payments, for years.
Calculate the following:
Each year, Quantum R Us would need to make a $ Select lease payment after taxes. That's if the machine is leased.
equal Select Select As part of this valuation analysis, the appropriate discount rate for these cash flows would equal Select
Based on the above, the calculations show that Quantum R Us's estimated net advantage to leasing, or NAL ie the NPV of leasing instead of buying is Select Select
In addition no math!:
In general, if Quantum R Us's calculated NAL is positive, then it should
he machine. And in this case, in order for Quantum R Us to be indifferent between leasing and purchasing the machine, the lease payment
would have to
In general, if Quantum R Us's calculated NAL is negative, then the other company that would be leasing the machine to Quantum R Us would
to sign the lease agreement with Quantum R Us
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