A financial lease has the following characteristics: Asset cost: $10,000; tax rate: 30%; CCA rate: 20%; after-tax cost of capital: 15%, lease term: 4 years, with $2,500 annual lease payments and tax shields in advance, and salvage and UCC tax shields in Year 4. Salvage is zero. The asset is part of a large pool. What important timing considerations should an analyst watch for in this analysis? What is its present value?

Answer for NPV at 15% is $2,479 with lagged tax shield

Answer for NPV at 15% is $2,330 without lagged tax shields

How do you get to these answers?