Your firm is considering leasing a new photocopier. The lease lasts for nine years. The lease calls for 10 payments of $1,000 per year with the first payment occurring immediately. The copier would cost $8,100 to buy and would be depreciated using the straight-line method to zero salvage over nine years. The firm can borrow at a rate of 8%. The corporate tax rate is 30%. What is the NPV of the lease?

Answer rating: 100% (QA)

Calculate net present value as follows A C D E 1 Year Lease payment Tax 30 Cash flows ... View the full answer