What is the maximum lease payment

Reference no: EM13519132

14) Your firm is considering leasing a new computer. The lease lasts for 9 years. The lease calls for 10 payments of $1,000 per year with the first payment occurring immediately. The computer would cost $7,650 to buy and would be straight-line depreciated to a zero salvage over 9 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 8%. The corporate tax rate is 30%. What is the after-tax cash flow from leasing relative to the after-tax cash flow from purchasing in years 1-9?
15) Your firm is considering leasing a new robotic milling control system. The lease lasts for 5 years. The lease calls for 6 payments of $300,000 per year with the first payment occurring at lease inception. The black box would cost $1,050,000 to buy and would be straight-line depreciated to a zero salvage. The actual salvage value is zero. The firm can borrow at 8%, and the corporate tax rate is 34%.
What is the maximum lease payment that you would be willing to make?

Reference no: EM13519132

Questions Cloud

Compute the total fixed overhead cost : Compute the total fixed overhead cost that was originally budgeted and compute the denominator activity figure that the company used in computing predetermined overhead rates.

Explain what are the spectator ions in the solution : Three solutions are mixed together to form a single solution. one contains 0.2 mol pb(CH3COO)2, the second contain 0.1mol Na2S and the third contains 0.1mol CaCl2. A. write the net ionic equations for the precipitation reaction or reactions that o..

How do you compute the change in the price of a five-year : How do you compute the change in the price of a five-year (until maturity) $1,000 face value zero-coupon bond that currently yields 7% when expected inflation increases from 3% to 4%?

Define freezing-point depression of the solution : The fact that boiling point of a pure solvent is lower than the boiling point of a solution of the same solvent is a direct consequence of the. freezing-point depression of the solution.

What is the maximum lease payment : What is the maximum lease payment that you would be willing to make?

Compute the variable manufacturing overhead spending : Compute the variable manufacturing overhead spending and efficiency variances and compute the fixed manufacturing overhead budget and volume variances.

Examples of how to relate reflection and action : Examples of how to relate reflection and action? I am writing a paper for theology, called a synthesis paper. I need a lengthy example, best answer gets most points.

Cash will be tendered to balance the equities, : 1) Dr. Dulbit Drillum, partner in the dental firm of Drillum, Fillum, and Billum, exchanged an office building (market value = $1,528,000) for an apartment building (market value = $1,450,000). Dr. Drillum owes $800,000 on a note secured by a mort..

Specify which of a good explanation it violates : Specify which of a good explanation it violates. The standard requires that a good explanation be explanatory, deep, powerful, falsifiable, modest, simple, and conservative

User Account

All Pages