If a firm can buy a machine for $100000, takes an investment tax credit of 20%, and lease out the machine for 9 years wi

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If A Firm Can Buy A Machine For 100000 Takes An Investment Tax Credit Of 20 And Lease Out The Machine For 9 Years Wi 1 (38.48 KiB) Viewed 41 times

If a firm can buy a machine for $100000, takes an investment tax credit of 20%, and lease out the machine for 9 years with lease payments at the beginning of the year, how much should the minimum annual lease payments be? Assume a 5-year straight-line depreciation, $33000 salvage and a tax rate of 40%. Assume further that it can borrow at a before tax rate of 8%. $6,700 $8,000 $8,600 $7,600 $7,200