Still need help in trying to get this Excel document to function correctly. I had to manually insert the figures. I have looked at the PV function and am not sure where to insert the data correctly. Hopefully this makes since.
Bruce
Equipment Lease Alternation
Five-year lease of computer hardware, as follows:
(Note: Assume a 12% discount rate)
Option 1 $4,000 in one lump sum paid at the beginning of the five-year lease
Option 2 5000 in five equal payments paid at the beginning of each year
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Option 1 $4,000.00
Factor 1.000
PV of lease cost $4,000.00 $4,000.00
Option 2 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Factor 1 0.893 0.797 0.712 0.636
PV of lease cost $1,000.00 $893.00 $797.00 $712.00 $636.00 $4,038.00