Present Value, Positive and Negative Aspects
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The company you work for is expanding and will need to obtain additional production equipment. Your manager is looking for a cost analysis of whether the company should buy or lease equipment. See attachment for data.
1) Calculate the PV for each option in the attached appendix.
2) List out three positive aspects of the option you chose and a rational for why they are positive.
3) List out three negative aspects of the option you chose and a rational for why they are negative.
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Solution Summary
This solution calculates the present value for the appendix and also lists five positive aspects of leasing and four negative aspects of leasing. All references used are included.
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The company you work for is expanding and will need to obtain additional production equipment. Your manager is looking for a cost analysis of whether the company should buy or lease equipment.
1) Calculate the PV for each option in the attached appendix.
The present value of payments for lease is $ 92970 and under purchases it $100000
Thus under lease its less.
The calculations are attached in the excel file
2) List out three positive aspects of the option you chose and a rational for why they are positive.
THus we will choose lease option:
Leases are contractual arrangements by which the owner of property (the "lessor") allows another person (the "lessee") to ...
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