Is this a PV or NPV problem?

[Chicago48]

I have a FV rent vs. lease problem to solve. I used a calculator and this is the answer it gave me.......Future Value: $ -3,117,051.09
Here is the problem:

Consider this scenario.

A company has the following alternatives on some real estate that it needs for its new plant. It can lease the facility for $10,000 a month for 15 years, or it can buy the facility now for $800,000. The company’s weighted average cost of capital is 12% and payments are made at the end of each month.

Based on this information, answer the following:
•Which is cheaper for the company: to buy or lease real estate? Show your computations. It is cheaper to buy.
I used the following online calculator:


http://tinyurl.com/ancn7zw

Would someone help me and check to be sure that my answer is correct? If it's not correct, would you send me the Excel formula to use? Today is Tuesday, homework is due Wednesday. Thanks.

[alansidman]

Shouldn't you be looking at the Net Present Value of a stream of payments of $10,000 per month for 15 years and compare that to the $800,000 that you could buy the Asset for today. This is how I would look at the problem.
If you agree, then use the NPV function in Excel

Here is a tutorial on its use. http://www.techonthenet.com/excel/formulas/npv.php
Alan

[jeffreybrown]

We would love to continue to help you with your query, but first, before we can proceed, please see the forum rules about proper thread titles and adjust accordingly...

Your post does not comply with Rule 1 of our Forum RULES. Your post title should accurately and concisely describe your problem, not your anticipated solution. Use terms appropriate to a Google search. Poor thread titles, like Please Help, Urgent, Need Help, Formula Problem, Code Problem, and Need Advice will be addressed according to the OP's experience in the forum: If you have less than 10 posts, expect (and respond to) a request to change your thread title. If you have 10 or more posts, expect your post to be locked, so you can start a new thread with an appropriate title.
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[Chicago48]

We would love to continue to help you with your query, but first, before we can proceed, please see the forum rules about proper thread titles and adjust accordingly...

Your post does not comply with Rule 1 of our Forum RULES. Your post title should accurately and concisely describe your problem, not your anticipated solution. Use terms appropriate to a Google search. Poor thread titles, like Please Help, Urgent, Need Help, Formula Problem, Code Problem, and Need Advice will be addressed according to the OP's experience in the forum: If you have less than 10 posts, expect (and respond to) a request to change your thread title. If you have 10 or more posts, expect your post to be locked, so you can start a new thread with an appropriate title.
To change a Title on your post, click EDIT then Go Advanced and change your title, if 2 days have passed ask a moderator to do it for you.

Thank you, I believe the problem was solved and I am handing it in.