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Thanks! An asset costs $694,000. The CCA rate for this asset is 33%. The asset's useful life is two years after which it will be
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An asset costs $694,000. The CCA rate for this asset is 33%. The asset's useful life is two years after which it will be worth $59,500. The corporate tax rate on ordinary income is 43%. The interest rate on risk-free cash flows is 10%. Assume payments are made at the end of the year. a. What set of lease payments will make the lessee and the lessor equally well off, assuming payments are made at the end of the year? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Before tax payment $ b. Show the general condition that will make the value of a lease to the lessor the negative of the value to the lessee. TLessor = T>Lessee OTLessorStep by Step Solution
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