ABD is a leasing company. The lease calls for 10 payments of $1,692 per year with the
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ABD is a leasing company. The lease calls for 10 payments of $1,692 per year with the first payment occurring immediately. The machine costs $8,483 to buy. The present value of CCA tax shield is $825. The present value of its salvage value is $463 and the present value of the tax on terminal loss is $67. ABD firm can borrow at a rate of 9%. The corporate tax rate is 32%.
What is ABD's NPV of leasing?
Related Book For
Financial Management for Decision Makers
ISBN: 978-0138011604
2nd Canadian edition
Authors: Peter Atrill, Paul Hurley
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