Question: Look at Table 25.1. How would the initial break-even operating lease rate change if rapid technological change in limo manufacturing reduces the costs of new

Look at Table 25.1. How would the initial break-even operating lease rate change if rapid technological change in limo manufacturing reduces the costs of new limos by 5% per year?
Table 25.1

Tear 2 3 4 6 2 Initial cost Maintenance costs etc Tax shield on costs Depreciation tax shield 75 12 +4.2 12 12 12 -12 12 -12 +4.2 +42+4.2+42 +4.2+42 +5.25 +8.40 602647620 +5.04 +3.02 +3.02 +1.51 255+60 26.19 93.1 7 Total 82.80 2.76-4.78-4.78-629 Plat 7%--9819 Break-even rent (level) 26.19 26.19-26.19 26.19-26.19 26.19 10 Break-even rent after tax | -17.02 | 17.02 | -17.02 | -17.02 | -17.02 | -17.02 | 17.02 PV at 7%--98.15b 12

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