Question
ASB is considering leasing a new machine. The lease calls for 8 payments of $1,211 per year with the first payment occurring immediately. The machine
ASB is considering leasing a new machine. The lease calls for 8 payments of $1,211 per year with the first payment occurring immediately. The machine costs $8,635 to buy. The present value of CCA tax shield is $826. The present value of its salvage value is $462 and the present value of CCA recapture is $85. ASB firm can borrow at a rate of 10%. The corporate tax rate is 30%. What is the NPV of leasing?
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The Handbook Of Financial Instruments
Authors: Frank J. Fabozzi
1st Edition
0471220922, 978-0471220923
