1. Hatwick Technology is considering leasing a new equipment. The lease lasts for 5 years. The lease calls for 5 payments of $10,200 per year with the first payment occurring immediately. The equipment would cost $44,000 to buy and would be straight-line depreciated to a zero salvage value over 5 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 6%. The corporate tax rate is 34%. What is the NPV of the lease relative to the purchase?
$1,120.00
-$526.34
-$857.15
-$1,475.28
$469.43
2. rf=0; (b). sigma_1y = $20. S0=100.( Do it in Excel)
2a. Calculate the delta of 3 month PUT with S0=100, while varying strike X from 80 to 120
2b. Calculate the delta of 12 month PUT with S0=100, while varying strike X from 80 to 120
2c. Calculate the delta of 3 month CALL with S0=100, while varying strike X from 80 to 120
2d. Calculate the delta of 12 month CALL with S0=100, while varying strike X from 80 to 120
2e. graph 2a and 2b in the same chart. y-axis is the delta and x-axis is the strike price.
2e. graph 2c and 2d in the same chart. y-axis is the delta and x-axis is the strike price.