Answered step by step
Verified Expert Solution
Question
1 Approved Answer
URGENT: please answer a-f i will give thumbs up You work as a financial analyst at WPWilly, Inc. You are evaluating how much Acme Limo
URGENT: please answer a-f
You work as a financial analyst at WPWilly, Inc. You are evaluating how much Acme Limo should change a client who will lease a car for 7 years it will cost Aome 575,000 to buy the car and the car can be depreciated on a five-year MACRS schedule. Acme Limo's pretax administrative costs including Maintenance, Insurance and Sling Cost are $10,000 per year and they ocur at the beginning of each year. The after tax cost of capital in 10% and the tax rate is 25 Lease payments are made in advance that is at the start of each year. The inflation rate is zero. a. How much is the depreciation in year 47 (sample answer $500.50) b. How much is the depreciation tax shield in year 4? (sample answer $500 50) a. How much in the present value of after tax administrative costs? sample answer $2500.60) o What is the total present value of Depreciation tax Shield? samolewer $2500.50) e. What is the before tax break even operating lease rate? sample answer: S2500 50) What is the after tax break even operating loose rato? (sample answer $2500.50) Depreciation Table for 5 years Year % 1 20.00% 2 32.00% 3 19.20% 4 11.5294 5 11.52% 6 5.78% i will give thumbs up
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started