You work as a financial analyst at Wells Fargo. You are performing a lease analysis for a client who owns a furniture company. You want to help your client to find out how much your client should charge a 6-year lease of a new desk to a start-up company. The new desk costs $3,100 and can be depreciated on a five-year MACRS schedule. The companys pretax administrative costs including Maintenance, Insurance and Selling Cost are $250 per year and they occur at the beginning of each year. The after tax cost of capital is 10% and the tax rate is 35%. Lease payments are made in advance, that is, at the start of each year. The inflation rate is zero. Depreciation Table for 5-year asset

Year % 1 20.00% 2 32.00% 3 19.20% 4 11.52% 5 11.52% 6 5.76%

(keep two decimal places please.) a. How much is the depreciation in year 4? b. How much is the depreciation tax shield in year 4? c. How much is the present value of after tax administrative costs? d. What is the present value of Depreciation tax Shield? e. What is the after tax break-even operating lease rate? f. What is the before tax break even operating lease rate?