Business, 21.02.2020 20:51 lizzyhearts

Ig Sky hospital plans to obtain a new MRI that costs $1.5 million and has an estimated four-year useful life. It can obtain a bank loan for the entire amount and buy the MRI, or it can lease the equipment. Assume that the following facts apply to the decision: - The MRI falls into the three-year class for tax depreciation, so the MACRS allowances are 0.33, 0.45, 0.15, and 0.07 in Years 1 through 4, respectively. - Estimated maintenance expenses are $75,000 payable at the beginning of each year whether the MRI is leased or purchased. - Big Sky's marginal tax rate is 40 percent. - The bank loan would have an interest rate of 15 percent. - If leased, the lease payments would be $400,000 payable at the end of each of the next four years. - The estimated residual (and salvage) value is $250,000.

a. What are the NAL and IRR of the lease? Interpret each value. b. Assume now that the salvage value estimate is $300,000, but all other facts remain the same. What is the new NAL? The new IRR?

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 05:30

The hartman family is saving $400 monthly for ronald's college education. the family anticipates they will need to contribute $20,000 towards his first year of college, which is in 4 years .which best explain s whether the family will have enough money in 4 years ?

Answers: 1

Answer

Business, 22.06.2019 12:30

In the 1970s, kmart used blue light specials to encourage customers to flock to a particular department having a temporary sale. a spinning blue light activated for approximately 30 seconds, and then an in-store announcement informed shoppers of the special savings in the specific department. over time, loyal kmart shoppers learned to flock to the department with the spinning blue light before any announcement of special savings occurred. if kmart was employing classical conditioning techniques, what role did the spinning blue light play?

Answers: 3

Answer

Business, 22.06.2019 21:00

Describe what fixed costs and marginal costs mean to a company.

Answers: 1

Answer

Business, 22.06.2019 22:10

Scoresby co. uses 6 machine hours and 2 direct labor hours to produce product x. it uses 8 machine hours and 16 direct labor hours to produce product y. scoresby's assembly and finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour, respectively. how much overhead cost will be charged to the two products? a. product x = $1,440; product y = $2,560 b. product x = $1,760; product y = $4,480 c. product x = $3,200; product y = $9,600 d. product x = $800; product y = $800

Answers: 1

Answer

You know the right answer?

Ig Sky hospital plans to obtain a new MRI that costs $1.5 million and has an estimated four-year use...

Questions