Question: Nodhead College needs a new computer. It can either buy it for $330,000 or lease it from Compulease. The lease terms require Nodhead to make

Nodhead College needs a new computer. It can either buy it for $330,000 or lease it from Compulease. The lease terms require Nodhead to make six annual payments (prepaid) of $78,000. Nodhead pays no tax. Compulease pays tax at 35%. Compulease can depreciate the computer for tax purposes straight-line over five years. The computer will have no residual value at the end of year 5. The interest rate is 9%. a. What is the NPV of the lease for Nodhead College? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole number.) Answer is complete and correct. Net present value $ (51,393) b. What is the NPV for Compulease? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Answer is complete but not entirely correct. Net present value $ 33,993 X c. What is the overall gain from leasing? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole number.) Overall gain
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