DogChew Products needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value. The equipment costs $930,000. The firm can lease it for $245,000 a year, or it can borrow the money to purchase the equipment at 9%. The firm's tax rate is 39%. The CCA rate is 20% (Class 8).

What is the after-tax lease payment?

Select one:

a. $123,350

b. $95,550

c. $106,150

d. $245,000

e. $149,450

....................................................................................................................

What is the present value of the depreciation tax shield?

Select one:

a.

$186,000

b.

$120,888

c.

$84,074

d.

$26,876

e.

$277,177