Genesco is considering two alternative 5-year leases. The first lease is for $2.100 per month for...
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Genesco is considering two alternative 5-year leases. The first lease is for $2.100 per month for 60 months. The second lease has no rent for the first 9 months, and then even monthly payments for the remaining 51 months. The company uses a WACC of 12% (monthly discounting of 1% per month) to evaluate these types of situations. At what lease payment amount on the second lease would the company be indifferent between these two options? Your answer should be between 2000.00 and 3000.00, rounded to 2 decimal places, with no special characters. Genesco is considering two alternative 5-year leases. The first lease is for $2.100 per month for 60 months. The second lease has no rent for the first 9 months, and then even monthly payments for the remaining 51 months. The company uses a WACC of 12% (monthly discounting of 1% per month) to evaluate these types of situations. At what lease payment amount on the second lease would the company be indifferent between these two options? Your answer should be between 2000.00 and 3000.00, rounded to 2 decimal places, with no special characters.
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The present value of both the annuities should be same Present value of annuity is calculated ... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
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