The lessor must calculate how much the lessee must pay in such a way as to guarantee the minimum expected profit. Assume

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answerhappygod
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The lessor must calculate how much the lessee must pay in such a way as to guarantee the minimum expected profit. Assume

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The lessor must calculate how much the lessee must pay in such a way as to guarantee the minimum expected profit. Assume that the landlord will require the tenant to pay in advance. Use the following data to determine: (1) Net cost to the lessor; (2) After Tax Annual Payment; (3) Before Annual Tax payment.
asset cost $10,000,000
useful life of the asset 5 years
discount rate or cost of capital 8.75%
tax rate 35%
linear depreciation
salvage value $0
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