Question 10 options:

Tyrion Corporation would like to take out an operating lease or buy a machine.The annual lease payments, given to them from the lessor, will be $17,300 payable at thebeginningof each year for 10 years.The cost to buy the machine is $130,000 now.The savage value is anticipated to be $8,000 at the end of 10 years.Maintenance costs of $3,250 (guaranteed and certain) will be made at thebeginningof each year for 10 years (this is only applying with the buy option).The CCA rate for this machine is 20% and the tax rate is 41%.Anytax shieldswill be recognized at theend of the year.

The borrowing rate is 5% and WACC is 15%.

Round to the nearest dollar.

What is the present value of the Annual Lease payment?

Please use a negative.For example, -500000

What is the present value of the tax savings for operating lease?

What is the Present value of the Annual maintenance payments?

Please use a negative.For example, -500000

What is the Present Value of the tax benefit they would get for the Annual Maintenance payments?

What is the Present Value of the CCA Tax Shield?