What is discount rate for this lease choice question

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Reference no: EM133268879

Question - Your company is considering to lease an expensive equipment, which costs $9,100,000, and it would be depreciated straight-line to zero over 5 years, after that it will be worthless.

You company is debating to lease or buy.

Lease expense would be $2,457,000 per year for 5 years.

Corporate tax rate is 30% .Firm's riskless borrowing rate is 13% before taxes.

What is annual depreciation tax shield?

What is after-tax lease payment?

What is discount rate for this lease choice question?

What is net advantage of lease (NAL) for this question?

Reference no: EM133268879

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