Stone co. is considering the acquisition of equipment. to buy the equipment, the cost is $15,192. to lease the equipment, stone must sign a noncancelable lease and make five payments of $4,000 each. the first payment will be paid on the first day of the lease. at the time of the last payment, stone will receive title to the equipment. the present value of an ordinary annuity of $1 is as follows: present value no. of periods 10% 12% 16% 1 0.909 0.893 0.862 2 1.736 1.690 1.605 3 2.487 2.402 2.246 4 3.170 3.037 2.798 5 3.791 3.605 3.274 the interest rate implicit in this lease is approximately
a. 10%.
b. 12%.
c. between 10% and 12%.
d. 16%

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?