University of Virginia Primus Automation and Lease Financing Terms Questions

University of Virginia Primus Automation and Lease Financing Terms Questions

Guiding Questions:

  1. Why is Primus Automation considering the lease of its factory automation system to Avanjet?
  2. How did Tom Baumann analyze the problem of setting the lease-financing terms?
  3. How does he calculate NPV and IRR for the lease and borrow-and-buy alternatives? (Complete case exhibit 6 to help answer this question.)
  4. How are Faulhaber and Honshu Heavy Industries using their leasing plans?
  5. What lease terms should Baumann recommend? How would you approach the negotiations with Avanjet?