A new photocopier costs $12,000 and Seeknom plans to purchase it to lease it out to his customer . Seeknom pays taxes at a rate of 50%. The photocopier is to be depreciated straight-line to zero over the next four years. Seeknom figures that it will be able to resell it for $1,200 at the end of year 4. The interest rate is 10%, Seeknom borrows at that rate. Assume that a purchase can be financed with 100% debt and that the first lease payment to Seeknom occurs one year from now. What is the minimum lease payment that Seeknom is willing to charge?

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To determine the minimum lease payment that Seeknom is willing to charge we need to calculate the pr... View the full answer