Question
yank's currently leases its equipment from pizza products for $2,500 per month. 2 years of the 5 year lease term remain. yank's is considering purchasing
yank's currently leases its equipment from pizza products for $2,500 per month. 2 years of the 5 year lease term remain. yank's is considering purchasing equipment to replace the leased equipment. yank's can purchase dough ball press for $5450 per unit, assembly table for $2,100 per unit, cardboard cutter for $4,100 per unit, plastic sealer for $2,695 per unit, and label installer for $1,000 per unit. B. yank's has the option of purchasing equipment from another supplier at a operating costs by $1000/ month over the life of equipment. assuming a 10% discount rate before tax. which option is more preferred? 3) what is the npv after taxfor each option mentioned previously. if purchased, all equipment will depreciate over 5 years, using the straight-line depreciation, and will have no salvage value. yank's tax rate is 30%. is the decision the same? 4) what factors other than cost savings should yank's consider in these decision problems?
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