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What is the minimum lease payment that would make purchasing a computer system and writing a 6-year lease contract on it? The price of the
What is the minimum lease payment that would make purchasing a computer system and writing a 6-year lease contract on it? The price of the computer system is $175,000, it is a five-year asset for depreciation purposes, it has a residual value of $3,000, it requires $500 maintenance per year, the cost of capital is 9%, and the corporate tax rate is 40%. (Note: MACRS rates for Years 1 to 6 are 0.20, 0.32, 0.19, 0.12, 0.11 and 0.06.)
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