A firm needs to either buy or lease $200,000 worth of equipment. The equipment has a...
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A firm needs to either buy or lease $200,000 worth of equipment. The equipment has a life of 6 years after which time it will be worthless. The equipment has a CCA rate of 30% and can be leased at a cost of $38,000 per year (payments due at the beginning of each year). The corporate tax rate is 33% and the cost of debt is 12%. What is the present value of the lease payments tax shield? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response A firm needs to either buy or lease $200,000 worth of equipment. The equipment has a life of 6 years after which time it will be worthless. The equipment has a CCA rate of 30% and can be leased at a cost of $38,000 per year (payments due at the beginning of each year). The corporate tax rate is 33% and the cost of debt is 12%. What is the present value of the lease payments tax shield? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response
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Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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