How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Aun Ali Your Own Question

Aun Ali
Aun Ali, Teacher
Category: Homework
Satisfied Customers: 355
Experience:  Cost and management accountant ( CMA)
Type Your Homework Question Here...
Aun Ali is online now
A new question is answered every 9 seconds

Dakota Trucking Company (DTC) is evaluating a potential lease

Resolved Question:

Dakota Trucking Company (DTC) is evaluating a potential lease for a truck with a 4-year life that costs $40,000 and falls into the MACRS 3-year class. If the firm borrows and buys the truck, the loan rate would be 10%, and the loan would be amortized over the truck’s 4-year life, so the interest expense for taxes would decline over time. The loan payments would be made at the end of each year. The truck will be used for 4 years, at the end of which time it will be sold at an estimated residual value of $10,000. If DTC buys the truck, it would purchase a maintenance contract that costs $1,000 per year, payable at the end of each year. The lease terms, which include maintenance, call for a $10,000 lease payment (4 payments total) at the beginning of each year. DTC's tax rate is 40%. Should the firm lease or buy? (Note: MACRS rates for Years 1 to 4 are 0.33, 0.45, 0.15, and 0.07.)
Submitted: 7 years ago.
Category: Homework
Expert:  Aun Ali replied 7 years ago.

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Aun Ali and 3 other Homework Specialists are ready to help you

Related Homework Questions