1.Your firm is considering leasing a radiographic x-ray machine. The lease lasts for 3 years. The lease calls for 4 paym

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1.Your firm is considering leasing a radiographic x-ray machine.
The lease lasts for 3 years. The lease calls for 4 payments of
$25,000 per year with the first payment occurring immediately. The
computer would cost $140,000 to buy and would be straight-line
depreciated to a zero salvage value over 3 years. The actual
salvage value is negligible. The firm can borrow at a rate of 12%.
The corporate tax rate is 40%.
What is the after-tax cash flow from leasing relative to the
after-tax cash flow from purchasing in years 1-3?
Group of answer choices
-$1,500
-$15,000
-$33,667
None of the rest
-$2,750
2.
Your firm is considering leasing a new robotic milling control
system. The lease lasts for 5 years. The lease calls for 6 payments
of $300,000 per year with the first payment occurring at lease
inception. The system would cost $1,050,000 to buy and would be
straight-line depreciated to a zero salvage value. The actual
salvage value is zero. The firm can borrow at 8%, and the corporate
tax rate is 34%.
What is the NPV of the lease?
Group of answer choices
-$295,040
-$305,388
None of the rest
-$111,690
-$309,690
3.
The Wordsmith Corporation has 10,000 shares outstanding at $30
each. They expect to raise $150,000 by a rights offering with a
subscription price of $25. How many rights must you turn in to get
a new share?
Group of answer choices
1.67
2.00
0.60
Insufficient data to determine
1.20