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Q10. Assume the initial cost savings provided by a lease is $100,000 because the purchase is no longer necessary, and the present value of the
Q10. Assume the initial cost savings provided by a lease is $100,000 because the purchase is no longer necessary, and the present value of the cash outflow attributable to the lease is $90,000 (already considered the depreciation tax shield and lease payment). Then the net advantage of the lease is: A. $10,000 B. $10,000 C. $190,000 D. $95,000 E. $190,000
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