=+E171 Heidelberg Cement, a German building materials company, is considering leasing a new cement packaging machine for

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=+E17–1 Heidelberg Cement, a German building materials company, is considering leasing a new cement packaging machine for €250,000 per year. The lease arrangement calls for a 6-year lease with an option to purchase the machine at the end of the lease for

€35,000. Assuming the corporate tax rate in Germany is 30%, what is the present value of the lease outflows, including the purchase option, if lease payments are made at the end of each year and if the after-tax cost of debt is 5%?

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Principles Of Managerial Finance

ISBN: 9781292261515

15th Global Edition

Authors: Chad J. Zutter, Scott Smart

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