FINA5352 Corp. is considering leasing an asset out. Here are the relevant facts: $900,000 Straight line...
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FINA5352 Corp. is considering leasing an asset out. Here are the relevant facts: $900,000 Straight line over 6 years to a zero residual value 6 years $180,000 per year, at the beginning of years 1, ..., 6. $30,000 Asset cost Depreciation Lease term Lease payment Asset residual market value at the end of the lease term Tax rate 40% 12% Interest rate a. Should FINA Corp. lease the asset out? Please show a detailed cash flow analysis in Excel. b. Please find the minimum lease payment that FINA5352 Corp. will accept (rounding to the nearest dollar). FINA5352 Corp. is considering leasing an asset out. Here are the relevant facts: $900,000 Straight line over 6 years to a zero residual value 6 years $180,000 per year, at the beginning of years 1, ..., 6. $30,000 Asset cost Depreciation Lease term Lease payment Asset residual market value at the end of the lease term Tax rate 40% 12% Interest rate a. Should FINA Corp. lease the asset out? Please show a detailed cash flow analysis in Excel. b. Please find the minimum lease payment that FINA5352 Corp. will accept (rounding to the nearest dollar).
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Answer rating: 100% (QA)
a To determine whether FINA5352 Corp should lease the asset out we need to compare the present value of cash inflows lease payments and residual value ... View the full answer
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