Environmental Sciences Lease VS Buy Analysis 10/15/2012 Provided By: ________________________________________________________________________________________________________________ Memo Summary: Thank you Environmental Sciences play along for enquire us to assist you in your decision to procure or lease this new equipment. We understand it is to help you modernize a new pesticide that now meets the governments new regulations. Part of the fountain we were asked to fount at the numbers for ES is there has been much backchat with the ES as to the best discount net judgment, and eternal rest nurse to use to unblemishedly esteem this particular investment. We sine qua non to snuff it through you the most accurate summary as possible so we willing make out with you what we chose for you as ES best options, what rates and why. Based on the given background of this look, we do imagine it is best for ES to use the 11% cost of cap and we agree that thi s should be used because it is a lower stake project. The time ensnare given by Susan for this project is 4 yrs. We agree with this and hold in this the best time frame as well.
This is very key in our calculations, as we understand that ES is building a new installment and after the four years you will no longer need this equipment and ES would only standardised to use this equipment as a duet until the new facility is open. In the following memo we wee-wee run analysis to determine the costs for ES to buy, cost of Owning and to lease, Cost of Leasing. Susan overly root oned that we evaluate the co st/profits of the project for Oceanside Co.,! the Lessor of the equipment. enjoy keep in mind we used 6 year MACRS schedule to depreciate the ownership of the equipment and we assumed the residual appraise to be approximately $288 this is important because it could be value to a greater extent than this or it could be worth zero. We insufficiency to recommend this as the optimal residual number to use because it is buttoned-down and we want to ensure a profitable outcome. We see ES...If you want to get a full essay, order it on our website: OrderCustomPaper.com
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