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For questions 41 through 45, use the following information. Your firm is considering leasing a new robotic milling control system. The lease lasts for 5
For questions 41 through 45, use the following information. Your firm is considering leasing a new robotic milling control system. The lease lasts for 5 years. The lease calls for 6 payments of $300,000 per year with the first payment occurring at lease inception. The equipment would cost $1,050,000 to buy and would be straight-line depreciated to a zero book value over its 5-year life. The salvage value will be zero as well. The firm can borrow at 8%, its WACC is 12%, and the corporate tax rate is 34% What is the after-tax cash flow in years 1 through 5? A. $-173,400 B. $-408,000 C.$-555,000 D. $-269,400 E. $-371,400 QUESTION 44 What is the NPV of the lease (Net Advantage of Leasing)? A. $-290,072 B.$-223,636 C. $-156,128 D.S $-305,388 E. $-391,699 Ciale
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