Agro-Chem,Inc Case 49M

# Agro-Chem,Inc Case 49M - CASE 49M Student Version...

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CASE 49M         Student Version 05/04/09           AGRO-CHEM, INC.          Lease Analysis This case illustrates the lease-versus-purchase decision from the standpoints of both the lessee and lessor. The model calculates the NAL (NPV) and IRR of the lease for both the lessee and the lessor. Note that the lessee's model is presented in two equivalent formats--a time line format which includes the cost of the equipment in lieu of the financing cash flows, and a time line format which includes loan payments and interest tax savings. Finally, note that the model contains a graph which plots lessee's NAL and lessor's NPV at different lease payment amounts. If you are using the student version of the model, some of the cells have been blanked out. Before using the model, it is necessary to fill in the empty cells with the appropriate formulas. Once this is done, the model is ready for use. The following cells have been blanked out: D44, D47, E63, D64, D69, D100, D123, E138, F157, G178 C187 ==== ========== =========== ============ ========== ============ =========== INPUT DATA:   KEY OUTPUT: (Note:  All dollar amounts are stated in thousands.)   General Data:     For Lessee: Invoice price \$1,500.00  PV cost of owning (\$1,267.79) Lease payment \$475.00  PV cost of leasing (\$1,030.21) NAL \$237.589   For Lessee Only: IRR -21.63%

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## This note was uploaded on 05/02/2009 for the course FINC 312 taught by Professor Varma during the Spring '08 term at University of Delaware.

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Agro-Chem,Inc Case 49M - CASE 49M Student Version...

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