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Please Help Solve A-F Thank You A local construction company (LCC) has the option of leasing a motorized skid steer loader (a.k.a. skid loader, skidsteer,

Please Help Solve A-F Thank You

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A local construction company (LCC) has the option of leasing a motorized skid steer loader (a.k.a. skid loader, skidsteer, or "bobcat" generically) machine for five years with an annual payment of $2,500, payable at the beginning of the year. LCC will save $6,000 p.a. in operating expense due to this machine. LCC's corporate tax rate is 21%. It can get secured financing at 6.3291 1392%. The WACC is 20%. The skid loader will have a salvage value of SO at the end of five years. LCC can buy the same machine at $10,000. Assume straight-line depreciation. a. Should LCC, the lessee, buy or lease? (Hint: The salvage value is discounted at WACC.) b. Assume that the lessor's corporate tax rate is 21%. Will the lessor acquire the machine to lease it to DWC? c. Assume that the lessee's corporate rate is 0% (zero percent) and the lease payment is S2235. Calculate the net benefit to the lessee and the lessor. d. Given the information in part c, calculate the maximum lease payment acceptable to the lessee and calculate the minimum lease payment acceptable to the lessor. Explain if they will be able to agree to the amount of lease payment. What variable may be changed most easily for them to agree to the amount of lease payment? Demonstrate your answer with numbers. e. Ignore the information in part c. Assume that the lessor's corporate tax rate is 50%The lessor will use MACRS depreciation method for a three-year asset, used at the first four dates (t0, 1, 2,3)). Will the lessor acquire the machine to lease it to the lessee? Explain. f. Assume that the cost of financing is 20% for both parties. Redo parts a through c Interpret the differences

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