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- What is the present value (PV) of a 12-year lease arrangement with an interest rate of 7.5 percent that requires annual payments of $4,250 per year with the first payment being due now?What is the present value of a 12 year lease arrangement with an interest rate of 7.5% that requires annual payments of $4250 per year with the first payment being due nowA manufacturer can lease a machine for 7 years at $3,000 per quarter, payable at the beginning of each quarter. Alternatively, they can purchase the machine for $78,000 and sell it for $8,700 in 7 years. The cost of capital is 6.2% compounded annually. a. What is the present value of the cost: (enter a positive value accurate to the nearest dollar) i) of the lease option? $ ii) of the purchase option? $ b. Should the manufacturer purchase or lease? O Purchase since Purchase PV is higher than Lease PV O Lease since Lease PV is higher than Purchase PV O Lease since Purchase PV is lower than Lease PV O Purchase since Lease PV is lower than Purchase PV Lease since Lease PV is lower than Purchase PV Purchase since Lease PV is higher than Purchase PV Submit Question
- What is the cash value of a three-year lease that require payments of $2097.64 payable at the beginning of each month for five years if interest is 10% compounded semi-annually?A contract has been signed to lease a building at P30, 000 per year with an annual increase of P1, 000 for 5 years. Payments are to be made at the end of each year from now. The prevailing interest rate is 7%. What is the lump sum paid today would be equivalent to the 5-year lease payment plan? whats the correct answer a. P130, 652.59 b. P142, 470.28 c. P137.952.69 d. P157, 609.38Four-year lease agreement requires payments of P10000 at the beginning of everyyear. If the interest rate is 6% compounded monthly, what is the cash value of thelease?
- Assuming the leasehold yield is 2% above the freehold yield, calculate the Years Purchase (YP) dual rate for 10 years if the accumulative rate is 3% and that a comparable freehold property let at full market rent of $40,000 has just been sold for $500,000. Hint: Analyse the market yield from the comparable first and then use it to calculate the required YP. 4.3872 7.3625 6.1250 5.3410A manufacturer can lease a machine for 6 years at $3,680 per quarter, payable at the beginning of each quarter. Alternatively, they can purchase the machine for $76,000 and sell it for $8,700 in 6 years. The cost of capital is 9.1% compounded annually. a. What is the present value of the cost: (enter a positive value accurate to the nearest dollar) i) of the lease option? ii) of the purchase option? GA2. A four-year lease agreement requires payments of RM10, 000 at the beginning of every year. If the interest rate is 6% compounded yearly, what is the cash value of the lease?
- Imagine you leased a piece of equipment for three years. The lease required payments of $10,000 per year, due at the end of each year. Calculate the present value of each payment if the interest rate is 10%. Complete the following table: Present Value of Payment Payment $10,000 $10,000 $10,000 Year Year 1 (end of this year) Year 2 (end of next year) Year 3 (end of the following year) What is the total present value of all three payments?A contract has been signed to lease a building at Php. 200,000.00 per year with an annual increase of Php. 1,500.00 for 8 years. Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8-year lease payment plan?What is the nominal annual rate of interest compounded monthly on a lease valued at $28,999.00 if payments of $3000.00 are made at the beginning of every 6 months for 5 years?