Question
A lease has a term of 6 years with annual payments of $8,100. The asset would cost $39,000 to buy and would be depreciated straight-line
A lease has a term of 6 years with annual payments of $8,100. The asset would cost $39,000 to buy and would be depreciated straight-line to a zero salvage value over 6 years. The actual salvage value is zero. If the firm has a tax rate of 25 percent, what is the incremental cash flow in Year 6 of leasing rather than purchasing?
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Financial Management Concepts and Applications
Authors: Stephen Foerster
1st edition
013293664X, 978-0132936644
