Cost of owning and cost of leasing tables are reproduced below. Using the appropriate table from the Chapter 12 Appendix, record the present value factor at 10% for each year and compute the present value cost of owning and the present value of leasing. Which alternative is more desirable at this interest rate? Do you think your answer would change if the interest rate were six percent instead of ten percent?Cost of Owning Anywhere Clinic - Comparative Present ValueFor-Profit Cost of Owning: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Net Cash Flow (48,750) Present value factor Present value answers = 2,500 2,500 2,500 2,500 5,000 Present value cost of owning = Cost of Leasing - Anywhere Clinic - Comparative Present ValueFor- Profit Cost of Leasing: Year 1 Year 1 Year 2 Year 3 Year 4 Year 5 Net Cash Flow (8.250) (8.250) (8.250) (8.250) Present value factor -- - (8,250) --- Present value answers = Present value cost of leasing =

Cost of owning and cost of leasing tables are reproduced below. Using the appropriate table from the Chapter 12 Appendix, record the present value factor at 10% for each year and compute the present value cost of owning and the present value of leasing. Which alternative is more desirable at this interest rate? Do you think your answer would change if the interest rate were six percent instead of ten percent?Cost of Owning Anywhere Clinic - Comparative Present ValueFor-Profit Cost of Owning: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Net Cash Flow (48,750) Present value factor Present value answers = 2,500 2,500 2,500 2,500 5,000 Present value cost of owning = Cost of Leasing - Anywhere Clinic - Comparative Present ValueFor- Profit Cost of Leasing: Year 1 Year 1 Year 2 Year 3 Year 4 Year 5 Net Cash Flow (8.250) (8.250) (8.250) (8.250) Present value factor -- - (8,250) --- Present value answers = Present value cost of leasing =

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter5: Making Automobile And Housing Decisions

Section: Chapter Questions

Problem 6FPE: Calculating required down payment on home purchase. How much would you have to put down on a house...

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Calculating required down payment on home purchase. How much would you have to put down on a house with an appraised value of 105,000 when the lender required an 80 percent loan-to-value ratio?
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