1. ABC Inc. has just signed a lease agreement with XYZ Computers. ABC agreed to pay $10,000 per month for 24 months. The purchase price of the equipment is $200,000. According to the lease agreement, XYZ will pay property taxes and insurance on the equipment. This lease is most likely an operating lease.
True
False
2. For a project with an initial investment of $42,000 and cash inflows of $10,000 a year for six years, calculate NPV given a required return of 12%/year.
a. -$775
b. $1,699
c. -$347
d. -$1,205
e. -$886