4. Evaluation by the lessee Allied Logistics Ltd. is considering leasing new computer equipment that will cost $20,000 (including shipping and installation). The lease payment is $4,000 per year for four years, paid at the beginning of each year. Other information pertaining to the equipment and lease is as follows: Maintenance of $200 per year will be paid by the lessor. Allied's tax rate is 35%. The CCA rate on the equipment is 30%. Allied's cost of borrowing is 4.8%. Estimated residual value of the equipment at the end of four years is expected to be $4,000. Based on the preceding information, complete the following table: Value Present value of the after-tax lease payments Present value of the CCA tax shield Present value of the after-tax maintenance costs Present value of the residual value The present value of the CCA tax shield makes leasing the equipment valuable to Allied Logistics. The present value of the after-tax maintenance costs makes leasing the equipment valuable to Allied. What is the net advantage to leasing (NAL) for Allied Logistics Ltd.? $1,883.77 $1,062.17 O $2705.27 Present value of the after-tax lease payments Present value of the CCA tax shield Present value of the after-tax maintenance costs Present value of the residual value $14,933.94 $9,707.06 $9,937.45 Present value of the CCA tax shield Present value of the after-tax maintenance costs $4,451.21 Present value of the residual value $5,123.19 The present value of the CCA tax shield makes leasing $4,895.77 nt Present value of the after-tax maintenance costs Present value of the residual value $0 The present value of the CCA tax shield makes leasing $481.84 hent $712.50 The present value of the after-tax maintenance costs ng the Present value of the residual value he present value of the CCA tax shield makes leasing $2,299.33 nt $3,316.00 he present value of the after-tax maintenance costs the $3,537.43 The present value of the CCA tax shield makes leasing the equipment valuable to Allied Logistics. The present value of the after-tax maintenance costs makes leasing th more hent valuable to Allied. less (MALL The present value of the after-tax maintenance costs makes leasing the equipment valuable to Allied. more What is the net advantage to leasing (NAL) for Allied Logistics Ltd.? less $1,883.77 4. Evaluation by the lessee Allied Logistics Ltd. is considering leasing new computer equipment that will cost $20,000 (including shipping and installation). The lease payment is $4,000 per year for four years, paid at the beginning of each year. Other information pertaining to the equipment and lease is as follows: Maintenance of $200 per year will be paid by the lessor. Allied's tax rate is 35%. The CCA rate on the equipment is 30%. Allied's cost of borrowing is 4.8%. Estimated residual value of the equipment at the end of four years is expected to be $4,000. Based on the preceding information, complete the following table: Value Present value of the after-tax lease payments Present value of the CCA tax shield Present value of the after-tax maintenance costs Present value of the residual value The present value of the CCA tax shield makes leasing the equipment valuable to Allied Logistics. The present value of the after-tax maintenance costs makes leasing the equipment valuable to Allied. What is the net advantage to leasing (NAL) for Allied Logistics Ltd.? $1,883.77 $1,062.17 O $2705.27 Present value of the after-tax lease payments Present value of the CCA tax shield Present value of the after-tax maintenance costs Present value of the residual value $14,933.94 $9,707.06 $9,937.45 Present value of the CCA tax shield Present value of the after-tax maintenance costs $4,451.21 Present value of the residual value $5,123.19 The present value of the CCA tax shield makes leasing $4,895.77 nt Present value of the after-tax maintenance costs Present value of the residual value $0 The present value of the CCA tax shield makes leasing $481.84 hent $712.50 The present value of the after-tax maintenance costs ng the Present value of the residual value he present value of the CCA tax shield makes leasing $2,299.33 nt $3,316.00 he present value of the after-tax maintenance costs the $3,537.43 The present value of the CCA tax shield makes leasing the equipment valuable to Allied Logistics. The present value of the after-tax maintenance costs makes leasing th more hent valuable to Allied. less (MALL The present value of the after-tax maintenance costs makes leasing the equipment valuable to Allied. more What is the net advantage to leasing (NAL) for Allied Logistics Ltd.? less $1,883.77
