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
Posted: Thu May 19, 2022 3:29 pm
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%.
$7,600
$8,000
$6,700
$8,600
$7,200
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%.
$7,600
$8,000
$6,700
$8,600
$7,200