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Your firm is considering leasing a magic box. The lease lasts for three years. The lease calls for three payments of $1,350 per year with
Your firm is considering leasing a magic box. The lease lasts for three years. The lease calls for three payments of $1,350 per year with the first payment occurring at lease inception. The magic box would cost $3,600 to buy and would be straight-line depreciated to zero salvage value over three years. The firm can borrow at 6%, and the marginal corporate tax rate is 30%. What is the NPV of the lease? You must show all work and be detailed.
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