Question
Kelso Corporation is considering leasing a new equipment. The lease lasts for 8 years. The lease calls for 8 payments of $208,000 per year with
Kelso Corporation is considering leasing a new equipment. The lease lasts for 8 years. The lease calls for 8 payments of $208,000 per year with the first payment occurring immediately. The equipment would cost $1,400,000 to buy and would be straight-line depreciated to a zero salvage value over 8 years. The firm can borrow at a rate of 5%. The corporate tax rate is 25%. The actual pre-tax salvage value is $75,000. What would the NPV of the lease relative to the purchase be? -$40,555.11 -$41,951.79 -$43,348.47 -$44,745.15 -$46,141.83
NO PAPER WORK ONLY TYPED ANSWERS ASAP NO PLAGARISM DONT USE CHAT GPT
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