Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. jeff & bezos is a fresh groceries delivery com

jeff & bezos is a fresh groceries delivery company. the company has access to borrowing...

80.2K

Verified Solution

Question

Accounting

Jeff & Bezos is a fresh groceries delivery company. The company has access to borrowing funds at a pre-tax rate of 6 percent per year. Jeff & Bezos pays income taxes using 24 % tax rate. The company would like to start using high-speed low-altitude drones to deliver grocery purchases directly to residential customers' backyards. The required fleet of drones costs $4,800,000. If the company chooses to buy them, the drones would be losing their economic value following the straight-line depreciation method during a three year period. The fleet of drones, due to their heavy usage, would have no salvage value in three years. Instead of buying the fleet of the drones, Jeff & Bezos is also contemplating leasing them for an estimated pre-tax annual cost of $1,760,000 for three years from a different company, Nets & Flicks, that owns the required number of drones. Nets & Flicks is in the same tax bracket as Jeff & Bezos. Calculate Nets & Flicks's (=Lessor) net advantage to leasing, a.k.a. NAL. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. If you got a negative answer, don't forget to put the minus sign.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

Which of the following examples best illustrates how climate change affects components of an ecosystem?A...

Basic Math
1.2K views

1 Identify the rules of exponents showing in the problem 2 Simplify the expression 83

Mechanical Engineering
1.2K views

A sample of 1095 steel is heated to 1500 degrees Fahrenheit. It is cooled to 500...

Physics
1.2K views

Where it is used Explain with diagram working of that device State gauss s theorem...

Geometry
1.2K views

In ANAP mZN 87 AP 15 and mZA 25 Find the length of AN to...

Statistics
1.2K views

Strength of concrete The compressive strength in kilopascals was measured for concrete blocks from five...

Accounting
1.2K views

Salmone Company reported the following purchases and sales of its only product. Salmone uses a...

Accounting
1.2K views

1, (14.5) La correccin de un error del perodo anterior que omiti $60 000 de...

Accounting
1.2K views

(i). Going concern concept (ii). Accruals concept (iii). Business entity concept (iv). Prudence concept (v)....

Accounting
1.2K views

After careful analysis, you have determined that a firm's dividends LOADING... should grow at 15...

Accounting
1.2K views

SLDU INDUSTRIES SDN BHD: THE BLAME GAME IN THE PERFORMANCE MEASUREMENT SYSTEM At CEOs Office...

Finance
1.2K views

In Year 1, VF Corporation split its stock two for one. On the day prior...