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Home / Questions / Analyze the cost of renting, leasing, and purchasing a backhoe loader using the data given here....

Analyze the cost of renting, leasing, and purchasing a backhoe loader using the data given here....

Analyze the cost of renting, leasing, and purchasing a backhoe loader using the data given here. Evaluate after-tax cash flow and its present value.

 

Basic assumptions:

Marginal tax rate = 46%

After-tax rate of return = 7%

Planned equipment use = 2000 h/year for 5 years

Present value factors (i = 7%)

Estimated resale value after 5 years = $40,000

Cost recovery method = 5-year

MACRS Down payment = $20,000

Loan terms = $80,000, 12%, 36 months = $2657.20/month

Interest payments:

Jul 22 2020 View more View Less

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