WileyPLUS Kieso, Intermediate Accounting, 17e Help | System Announcements CALCULATOR PRINTER VERSION 1 BACK NEXT ASSIGNMENT RESOURCES Problem 6-10 АСС-370 TОРІC 04 ASSIGNMENT Marigold Inc. owns and operates a number of hardware stores in the New England region. Recently, the company has decided to locate another store in a rapidly growing area of Maryland. The company is trying to decide whether to purchase or lease the building and related facilities. Exercise 6-07 (Part Level Submission) D Exercise 6-08 (Part Level Submission). Exercise 6-09 Exercise 6-10 (Part Level Submission). Purchase: The company can purchase the site, construct the building, and purchase all store fixtures. The cost would be $1,861,400. An immediate down payment of $406,400 is required, and the remaining $1,455,000 would be paid off over 5 years at $354,200 per year (including interest payments made at end of year). The property is expected to have a useful life of 12 years, and then it will be sold for $508,400. As the owner of the property, the company will have the following out-of-pocket expenses each period. Property taxes (to be paid at the end of each year) Insurance (to be paid at the beginning of each year) Other (primarily maintenance which occurs at the end of each year) $41,860 Exercise 6-12 2 Problem 6-07 (Part Level Submission) Problem 6-08 Problem 6-10 Problem 6-14 26,960 17,170 $85,990 Lease: First National Bank has agreed to purchase the site, construct the building, and install the appropriate fixtures for Marigold Inc. if Marigold will lease the completed facility for 12 years. The annual costs for the lease would be $266,320. Marigold would have no responsibility related to the facility over the 12 years. The terms of the lease are that Marigold would be required to make 12 annual payments (the first payment to be made at the time the store opens and then each following year). In addition, a deposit of $104,900 is required when the store is opened. This deposit will be returned at the end of the 12th year, assuming no unusual damage to the building structure or fixtures. Review Score Review Results by Study. Objective Click here to view factor tables Compute the present value of lease vs purchase. (Currently, the cost of funds for Marigold Inc. is 11%.) (Round factor values tol5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Lease Purchase Present value Which of the two approaches should Marigold Inc. follow? ArtivateWindows Marigold Inc. should the facilities LINK TO TEXT LINK TO TEXT 3:05 PM Type here to search 3/27/2020 DELL References 00848itemid-nopolice Future Value of 1 (Future Value of a Single Sum) FVEnj = (1 + i)" (n) Periods 3% 4% 5% 6% 1. 1 02000 104040 1 06121 1 08243 1 10408 1 02500 1 05063 107689 1 10381 1 13141 103000 1 06090 1 09273 1 12551 1 15927 104000 1 08160 1 12486 1 16986 121665 1 05000 1 10250 1 15763 121551 127628 1 06000 1 12360 1 19102 1 26248 1.33823 1 12616 1 14869 1 17166 1 19509 121899 1 15969 1 18869 121840 124886 128008 1 19405 122987 126677 130477 134392 126532 11593 6857 142331 1 48024 134010 1 40710 147746 155133 162889 141852 150363 159385 168948 1 79085 7. 10 124337 126824 1.31209 134489 1.37851 141297 144830 153945 160103 166507 173168 180094 11 138423 1 42576 1 46853 151259 155797 171034 179586 1 88565 197993 207893 1 89830 201220 2 13293 2 26090 239656 12 13 129361 14 1.31948 15 134587 2 18287 229202 2 40662 2 52695 265330 2 54035 2 69277 2 85434 3.02560 3.20714 187298 194790 1.37279 1 40024 1 42825 1 45681 1 48595 148451 152162 155966 159865 160471 165265 170243 2 02582 175351 1 80611 16 17 18 19 20 2 10685 2 19112 163862 Type here to search DELL 2345