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(11C) Purchase or Lease
09-25-2018, 01:28 PM
Post: #2
RE: (11C) Purchase or Lease
(09-25-2018 10:24 AM)Gamo Wrote:  Company needs a new photocopier and is considering leasing the equipment
as an alternative to buying. The end of the year net cost of each option is:

Purchase

Year Net Cash Cost
1 533
2 948
3 1,375
4 1,815
5 2,270

Is the numbers reversed ?
Normally it cost more (mainly depreciation) at the beginning
I would use the copier for 1 year, sell it, and buy another Big Grin

If numbers are allowed to input backwards, NPV can be much simpler, with Horner's rule:
Discount rate = 1.15 (stored in memory 0):

2270 RCL-0 /
1815 + RCL-0 /
1375 + RCL-0 /
948 + RCL-0 /
533 + RCL-0 /

We get the same NPV of 4250.71, without using X^Y
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Messages In This Thread
(11C) Purchase or Lease - Gamo - 09-25-2018, 10:24 AM
RE: (11C) Purchase or Lease - Albert Chan - 09-25-2018 01:28 PM
RE: (11C) Purchase or Lease - Dieter - 09-25-2018, 04:27 PM
RE: (11C) Purchase or Lease - Albert Chan - 09-25-2018, 06:36 PM
RE: (11C) Purchase or Lease - Gamo - 09-26-2018, 02:11 AM
RE: (11C) Purchase or Lease - Dieter - 09-26-2018, 05:40 AM
RE: (11C) Purchase or Lease - Gamo - 09-26-2018, 07:37 AM
RE: (11C) Purchase or Lease - Albert Chan - 09-26-2018, 12:53 PM
RE: (11C) Purchase or Lease - Dieter - 09-26-2018, 06:59 PM
RE: (11C) Purchase or Lease - Gamo - 09-27-2018, 01:23 AM
RE: (11C) Purchase or Lease - Dieter - 09-30-2018, 05:45 PM



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