Beginning of the period annual lease payment

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Using the following information, compute the beginning of the period annual lease payment that the lessor would have to charge to realize the required after-tax return.

Asset cost = $15 million

Expected Selling Price at end-of-lease = $2,800,000

Lease life = 5 years

Depreciable life of the asset = 5 years

Depreciation is straight line

Salvage value for tax purposes is, of course, zero

K = 10.5%

T =0.40

Reference no: EM132199242

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