Question
ASB is considering leasing a new machine. The lease calls for 9 payments of $1,474 per year with the first payment occurring immediately. The machine
ASB is considering leasing a new machine. The lease calls for 9 payments of $1,474 per year with the first payment occurring immediately. The machine costs $8,548 to buy. The present value of CCA tax shield is $908. The present value of its salvage value is $488 and the present value of CCA recapture is $86. 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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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
