The oviedo company is considering the purchase of a new machine to replace an obsolete one. the machine being used for the operation has a book value and a market value of zero. however, the machine is in good working order and will last at least another 10 years. the proposed replacement machine will perform the operation so much more efficiently that oviedo’s engineers estimate that it will produce after-tax cash flows (labor savings) of $8,000 per year. the after-tax cost of the new machine is $45,000, and its economic life is estimated to be 10 years. it has zero salvage value. the firm’s wacc is 10%, and its marginal tax rate is 25%. should oviedo buy the new machine?

Verizon communications, inc., provides the following footnote relating to its leasing activities in its 10-k report. the aggregate minimum rental commitments under noncancelable leases for the periods shown at december 31, 2010, are as follows: years (dollars in millions) capital leases operatingleases 2011 $97 $1,898 2012 74 1,720 2013 70 1,471 2014 54 1,255 2015 42 1,012 thereafter 81 5,277 total minimum 418 $ 12,633 rental commitments less interest and (86) executory costs present value of 332 minimum lease payments less current (75) installments long-term obligation $257 at december 31, 2010 (a) confirm that verizon capitalized its capital leases using a rate of 7.4 %. (b) compute the present value of verizon's operating leases, assuming an 7.4% discount rate and rounding the remaining lease term to 3 decimal places. (use a financial calculator or excel to compute. do not round until your final answers. round each answer to the nearest whole number.)