Question: Use the model in File C18 to work this problem. a. Refer to Problem 18-6. Determine the lease payment at which Maltese would be indifferent

Use the model in File C18 to work this problem.
a. Refer to Problem 18-6. Determine the lease payment at which Maltese would be indifferent to buying or leasing—that is, find the lease payment that equates the NPV of leasing to that of buying.
b. Using the $400,000 lease payment, what would be the effect if Maltese’s tax rate fell to 20 percent? What would be the effect if the tax rate fell to zero percent? What do these results suggest?

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