Suppose you are contemplating the purchase of a commercial lawn mower at a cost of $4,000. The expected lifetime of the machine is three years. You can lease the asset to a local business for $2,000 annually (payable at the end of each year) for three years. The lessee is responsible for the upkeep and maintenance of the machine during the three-year period.

Use the preceding information to calculate the present value of the income from the investment to decide if the investment will be profitable in each of the following two cases.

Suppose you can borrow (and lend) money at an interest rate of 6%.
At this interest rate, the $4,000 investment required to purchase the lawn mower be profitable.
Now, suppose you can borrow (and lend) money at an interest rate of 13%.
At this interest rate, the $4,000 investment required to purchase the lawn mower be profitable.

The following accounts appeared in recent financial statements of delta air lines. identify each account as either a balance sheet account or an income statement account. for each balance sheet account, identify it as an asset, a liability, or stockholders' equity. for each income statement account, identify it as a revenue or an expense. item financial statement type of account accounts payable balance sheet advanced payments for equipment balance sheet air traffic liability balance sheet aircraft fuel (expense) income statement aircraft maintenance (expense) income statement aircraft rent (expense) income statement cargo revenue income statement cash balance sheet contract carrier arrangements (expense) income statement flight equipment balance sheet frequent flyer (obligations) balance sheet fuel inventory balance sheet landing fees (expense) income statement parts and supplies inventories balance sheet passenger commissions (expense) income statement passenger revenue income statement prepaid expenses income statement taxes payable balance sheet

Asavings account that pays interest every 3 months is said to have a interest period

Which of the following is an effective strategy when interest rates are falling? a. use long-term loans to take advantage of current low rates. b. use short-term loans to take advantage of lower rates when you refinance a loan. c. deposit to a short-term savings instrumentals to take advantage of higher interest rates when they mature. d.select short-term savings instruments to lock in earnings at a current high rates.