Assignment Exercise 23–1: Cost of Owning and Cost of Leasing Cost of owning and cost

Assignment Exercise 23–1: Cost of Owning and Cost of Leasing Cost of owning and cost of leasing tables are reproduced below. Required Using the appropriate table from the Chapter 12 Appendices, record the present value fac- tor at 10% for each year and compute the present value cost of owning and the present value of leasing. Which alternative is more desirable at this interest rate? Do you think your answer would change if the interest rate was six percent instead of ten percent? Cost of Owning: Anywhere Clinic—Comparative Present Value For-Profit Cost of Owning: Year Year 1 Year 2 Year 3 Year 4 Year 5 Net Cash Flow (48,750) 2,5002,500 2,500 2,500 5,000 Present value factor Present value answers? Present value cost of owning ? Cost of Leasing: AnywhereClinic—Comparative Present Value Line For-Profit Cost # of Leasing:Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 19 Net Cash Flow (8,250)(8,250) (8,250) (8,250) (8,250) —- 20 Present value factor 21Present value answers ? 22 Present value cost of leasing ?