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Eagle Manufacturing: Author Date Purpose

This document provides information to compare the costs of buying versus leasing an asset valued at $35,000 over a 36 month period. It outlines the initial investment, monthly costs, salvage value, and net present values of both options. Based on the analysis, the choice is to buy the asset, as it has a lower net present value of $16,203.57 compared to the lease option's value of $16,919.39.

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anand senn
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110 views2 pages

Eagle Manufacturing: Author Date Purpose

This document provides information to compare the costs of buying versus leasing an asset valued at $35,000 over a 36 month period. It outlines the initial investment, monthly costs, salvage value, and net present values of both options. Based on the analysis, the choice is to buy the asset, as it has a lower net present value of $16,203.57 compared to the lease option's value of $16,919.39.

Uploaded by

anand senn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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07/08/2022

Eagle Manufacturing
Author ANAND KUMAR
Date 7/7/2022
Purpose

599896757.xlsx Page 1 Documentation


Eagle Manufacturing
Product Information Months Asset Value Buy Option Lease Option
Current Price $ 35,000 Initial Investment $ 35,000 $ (37,088) $ (2,500)
Salvage Value $ 15,000 1 34,755 - (500)
Salvage Months 120 2 34,512 - (500)
3 34,270 - (500)
Buy Condition 4 34,030 - (500)
Service Contract $ 950 5 33,792 - (500)
Sales Tax Rate 3.25% 6 33,555 - (500)
Tax on Sale $ 1,138 7 33,321 - (500)
Resale Percent* 90.0% 8 33,087 - (500)
9 32,856 - (500)
Lease Conditions 10 32,626 - (500)
Security Deposit $ 2,500.00 11 32,397 - (500)
Monthly Payment $ 500 12 32,171 - (500)
13 31,945 - (500)
Buy vs. Lease 14 31,722 - (500)
Annual Discount Rate 5.25% 15 31,500 - (500)
Monthly Discount Rate 0.44% 16 31,279 - (500)
Buy Net Present Value $ (16,203.57) 17 31,060 - (500)
Lease Net Present Value $ (16,919.39) 18 30,843 - (500)
Choice BUY 19 30,627 - (500)
20 30,413 - (500)
21 30,200 - (500)
* Resale percent represents the percent of the 22 29,988 - (500)
depreciated value of the asset. 23 29,778 - (500)
24 29,570 - (500)
25 29,363 - (500)
26 29,157 - (500)
27 28,953 - (500)
28 28,751 - (500)
29 28,549 - (500)
30 28,350 - (500)
31 28,151 - (500)
32 27,954 - (500)
33 27,758 - (500)
34 27,564 - (500)
35 27,371 - (500)
36 27,179 - (500)
End of Contract $ 24,462 $ 2,500

599896757.xlsx Buy vs. Lease 07/08/2022

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