Question: A firm needs to obtain a specialized machine, which would cost $ 6 9 0 0 0 0 to buy. It would be depreciated at

A firm needs to obtain a specialized machine, which would cost $690000 to buy. It would be depreciated at the rate of $69000 per year for both accounting and tax purposes, and could be sold in five years for $345000. The firm has the option of leasing the machine for five years. This would be an operating lease, with payments of $96600 per year at the beginning of each year. The company is subject to a tax rate of 40% and its pre-tax borrowing cost is 7%. What is the total undiscounted after-tax net cash flow associated with this proposed lease?
-$714840
-$82800
-$140760
$262200
A firm needs to obtain a specialized machine,

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