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Now assume that your candle company has a zero percent (0%) marginal tax rate and you are trying to compute the maximum lease payment you
Now assume that your candle company has a zero percent (0%) marginal tax rate and you are trying to compute the maximum lease payment you would consider (referred to as a Reservation Payment in the PowerPoint). Which of the following is the correct maximum lease payment the company would consider, if it had a 0% marginal effective tax rate? You can use the following table to help organize your thoughts and the following formula to help you solve for the answer: Value of lease = $240,000 - LmaxAnnuity Dur Factor) Time Period 0 2 B Initial Cost $240.000 Lease Payments 1 Max Max Max Lease Tax Shield CCA Tax Shield Terminal Loss Tax Shield Salvage Value Annual Cash Flows PV of Annual Cash Flow Net Advantage to Leasing 0585,470 O$81.288 S87.734 $94.621 ONone of the above are correct Now assume that your candle company has a zero percent (0%) marginal tax rate and you are trying to compute the maximum lease payment you would consider (referred to as a Reservation Payment in the PowerPoint). Which of the following is the correct maximum lease payment the company would consider, if it had a 0% marginal effective tax rate? You can use the following table to help organize your thoughts and the following formula to help you solve for the answer: Value of lease = $240,000 - LmaxAnnuity Dur Factor) Time Period 0 2 B Initial Cost $240.000 Lease Payments 1 Max Max Max Lease Tax Shield CCA Tax Shield Terminal Loss Tax Shield Salvage Value Annual Cash Flows PV of Annual Cash Flow Net Advantage to Leasing 0585,470 O$81.288 S87.734 $94.621 ONone of the above are correct
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