Question
An asset costs $790,000 and will be depreciated in a straight-line manner over its three-year life. It will have no salvage value. The corporate tax
An asset costs $790,000 and will be depreciated in a straight-line manner over its three-year life. It will have no salvage value. The corporate tax rate is 21 percent and the appropriate interest rate is 6 percent. a. What would the lease payment have to be to make both the lessor and lessee indifferent about the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume that the lessee pays no taxes and the lessor pays taxes. For what range of lease payments does the lease have a positive NPV for both parties? (Enter your answers from lowest to highest. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
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