lease or buy

yr0-yr2
lease rental 55000
DR adavnce 2.8333
PV
Total PV
yr2-yr-4
tax saving .25
DR
PV
totl PV

Buying decsion
0 1 2 3 4
machine cost (160,000.00)
residual value 4000
maintence cost -8000 -8000 -8000
tax saving 2000 2000 2000
Tax CA W1 -10000 -7500 -22500
ncf (160,000.00) (8,000.00) (16,000.00) (9,500.00) (20,500.00)
DR 1 0.909 0.826 0.751 0.683
-7273 -13223 -7137 -14002
(201,635.13)

Cap.all tax saving

40000 machine 160000
30000 10000 2 CA calimed -70000
50000 7500 3 RV -40000
12500 4 balnce 50000
 3 year repakcement cost
0 1 2 3
machine cost -160000
Salavage value 40000
maintence cost -8000 -8000 -8000
NCF -160000 -8000 -8000 32000
DR 10% 1 0.909 0.826 0.751
PV -160000 -7273 -6612 24042 10158
NPV -149842

EAC -60253.78

3 year repakcement cost

0 1 2 3 4
machine cost -160000
Salavage value 11000
maintence cost -12000 -12000 -12000 -12000
NCF -160000 -12000 -12000 -12000 -1000
-41635 DR 10% 1 0.909 0.826 0.751 0.683
PV -160000 -10909 -9917 -9016 -683
NPV -189842

EAC -59889.68

recoomendation
Annity factor
2.487

Annity factor
3.170
-29842