Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) ABC Transport Company (ATC) is estimating merits of leasing versus purchasing a truck with a four-year life which costs $40,000 and falls into MACRS 3-year class. If firm borrows and purchases truck, the loan rate would be= 10%, and loan would be amortized over truck's 4-year life, so interest expense for taxes would refuse over time. Loan payments would be made at the end of each year. The truck will be utilized for four years, at the end of which time it will be sold at the estimated residual value of 0. If DTC purchases the truck, it would buy the maintenance contract which costs $1,000 per year, payable at the end of each year. The lease terms, that include maintenance, call for a $12,000 lease payment (4 payments total) at beginning of each year. DTC's tax rate is= 40%. What is the net benefit to leasing? Suppose MACRS rates for Years 1 to 4 are 0.3333, 0.4445, 0.1481, and 0.0741.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914416

Have any Question? 


Related Questions in Basic Finance

An all-equity firm has 100000 shares outstanding worth 10

An all-equity firm has 100,000 shares outstanding worth $10 each. The firm is considering a project that requires an investment of $400,000 and has an NPV of $50,000. The company is also considering financing this projec ...

A simple random sample of 120 men results in a mean of 80

A simple random sample of 120 men results in a mean of 80 beats per minute, and a standard deviation of 11 beats per minute. Based on the sample results, the researcher concludes that the pulse rates of men have a standa ...

The net present value method and the internal rate of

The net present value method and the internal rate of return method may produce different decisions when selecting among mutually exclusive projects. What is the source of this conflict? A shoe manufacturer is considerin ...

Now consider a second joint of the same material width and

Now consider a second joint of the same material, width and thickness as the joint in problem 4 above but eccentrically loaded. This time, however, the line of action of the external load is 0.563 in. removed from the ce ...

1 why are supporters of the efficient markets hypothesis

1. Why are supporters of the efficient markets hypothesis unconvinced that differences between the theoretical and actual behavior of financial markets actually invalidate the hypothesis? 2. According to an article in th ...

Bruce wayne borrowed 14 30000 for investment purposes on

Bruce Wayne borrowed $14 300.00 for investment purposes on May 19, on a demand note providing for a variable rate of interest and payment of any accrued interest on December 31. He paid $1,300.00 on June 28, $1,450 on Se ...

Accounting statements can be manipulated please try to give

Accounting statements can be manipulated. Please try to give an argument pro and con on this ethical issue. Any actual public examples you would like to cite would be most appreciated by all. Scenario: Many brokerage fir ...

Divide speaking responsibilities for a team presentationin

Divide speaking responsibilities for a team presentation In teams of three or four, plan how to divide parts of a presentation. Your topic is international copyright laws, and your audience consists of an international g ...

The fine garments company sells fashion clothing the

The Fine Garments Company sells fashion clothing. The forecasted annual demand for their premium leather jacket is 2,000. The order-processing cost per order is $40, and the inventory holding cost is $35/item/year. How m ...

Tom has 5000 to invest and would like to buy a 9500 jet ski

Tom has $5000 to invest and would like to buy a $9500 jet ski on 4 years . If interest rate is compounded monthly, what interest he has to receive monthly to reach his goal?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro