Posted by **Nick** on Tuesday, April 12, 2011 at 2:23pm.

Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards, is considering a 5 year, $6,000,000 bank loan to finance service equipment. The loan has an interest rate of 10% and would be amortized over 5 years, with 5 end-of-year payments. Sutton can also lease the equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the bank loan payment than the lease payment?

Note: subtract the loan payment from the lease payment

- Finance -
**heldud**, Tuesday, April 19, 2011 at 6:05pm
enter "=PMT(10%,5,6000,0)" into excel withough quatation, or using a financial calculator would be fine. The answer would be the loan payment. subtract this from the lease payment you get 207 thousand and something

- Finance -
**D**, Thursday, February 26, 2015 at 8:59pm
62,025

## Answer This Question

## Related Questions

- Finance - Your firm is considering the following three alternative bank loans ...
- math - Compute the hurdle rate above based on the following.1. Note payable bank...
- finance - Kohers Inc is considering a leasing arrangement to finance some ...
- Finance - Kohers Inc is considering a leasing arrangement to finance some ...
- Business finance - In a discount interest loan, you pay the interest payment up...
- health care finance - Your firm is considering the following three alternative ...
- finance - Your firm is considering the following three alternative bank loans ...
- Finance - Your firm is considering the following three alternative bank loans ...
- Finance - Delta Software is considering a new project whose data are shown below...
- Finance - You just borrowed $15,000 from a bank. If you pay $4,000 at the end of...

More Related Questions