U.S. Bilvet wishes to acquire a $100000 bilvet- degreasing machine, which has a useful life of 8 years. At the end of this time, the machine's scrap value will be $8000. The asset falls into 5 years property class for cost recovery (depreciation) purposes. The company use either lease or debt financing. Lease payments of $16000 at the beginning of each year for the lease periods would be required. If debt financed, the interest rate would be 14%, and the debt payment would be due at the beginning of each of the 8 years. The company is in 40 % tax bracket. Calculate the NPV of leasing and owning the machine. Which method of financing has the lower present value of cash outflows? ***** excel formula***** **Please give me a solution in excel with
U.S. Bilvet wishes to acquire a $100000 bilvet- degreasing machine, which has a useful life of 8 years. At the end of this time, the machine's scrap value will be $8000. The asset falls into 5 years property class for cost recovery (depreciation) purposes. The company use either lease or debt financing. Lease payments of $16000 at the beginning of each year for the lease periods would be required. If debt financed, the interest rate would be 14%, and the debt payment would be due at the beginning of each of the 8 years. The company is in 40 % tax bracket. Calculate the NPV of leasing and owning the machine. Which method of financing has the lower present value of cash outflows? ***** excel formula***** **Please give me a solution in excel with
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:U.S. Bilvet wishes to acquire a $100000 bilvet-
degreasing machine, which has a useful life of 8 years.
At the end of this time, the machine's scrap value will
be $8000. The asset falls into 5 years property class for
cost recovery (depreciation) purposes. The company
use either lease or debt financing. Lease payments of
$16000 at the beginning of each year for the lease
periods would be required. If debt financed, the
interest rate would be 14%, and the debt payment
would be due at the beginning of each of the 8 years.
The company is in 40 % tax bracket. Calculate the NPV
of leasing and owning the machine. Which method of
financing has the lower present value of cash
outflows? *****
excel formula**
**Please give me a solution in excel with
*****
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