Evaluation by the Lessor

1. Options: ($9,707.06 ; $9,937.45, $14,933.94)

2. Options: ($5,123.19 ; $4,451.21 ; $4,895.77)

3.Options: ( $0 ; $481.84 ; $712.50)

4. Options: ($3,537.43 ; $3,316.00 ; $2,299.33)

5. Options: (more ; less)

6. Options: (more ; less)

7. Options: ($1,062.17 ; $920.09 ; $1,883.77

Mitata Co. is considering leasing new computer equipment that will cost $20,000 (including shipping and installation). The lease payment is $4,000 per year for four years, paid at the beginning of each year. Other information pertaining to the equipment and lease is as follows: Maintenance of $200 per year will be paid by the lessor. Mitata's tax rate is 35%. CCA rate on the equipment is 30%. Mitata's cost of borrowing is 4.8%. Estimated residual value of the equipment at the end of 4 years is expected to be $4,000. Based on the preceding information, complete the following table: The present value of the CCA tax shield makes leasing the equipment__valuable to Mitata. The present value of the after-tax maintenance costs makes leasing the equipment__valuable to Mitata. What is the Net Advantage to Leasing (NAL) for Mitata Co.? $1, 062.17 $920.09 $1, 883.77