Brock Construction is contemplating purchasingileasing a package of Asphalt Milling Equipment which will cost $4 million. Assets

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Brock Construction is contemplating purchasingileasing a package of Asphalt Milling Equipment which will cost $4 million. Assets will qualify for a 30% CCA rate. The salvage value is expected to be zero in 8 years. Same package can be leased for $'f00.000 per year for 8 years; Assume that the assets pool remains open. and the tax rate is 40%. Company's cost of borrowing is 10% pre-tax.

What would the lease payment have to be for both lessor and lessee to be indifferent to the lease agreement?

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Jul 11, 2023 02:12 AM

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Brock Construction is contemplating purchasingileasing a package of Asphalt Milling Equipment which will cost $4 million. Assets

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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