Question: 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

 Mitata Co. is considering leasing new computer equipment that will cost

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: Value Present value of the after-tax lease payments Present value of the CCA tax shield Present value of the after-tax maintenance costs Present value of the residual value The present value of the CCA tax shield makes leasing the equipment The present value of the after-tax maintenance costs makes leasing the equipment What is the Net Advantage to Leasing (NAL) for Mitata Co.? valuable to Mitata. valuable to Mitata. more $920.09 O $1,062.17 o $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: Value Present value of the after-tax lease payments Present value of the CCA tax shield Present value of the after-tax maintenance costs Present value of the residual value The present value of the CCA tax shield makes leasing the equipment The present value of the after-tax maintenance costs makes leasing the equipment What is the Net Advantage to Leasing (NAL) for Mitata Co.? valuable to Mitata. valuable to Mitata. more $920.09 O $1,062.17 o $1,883.77

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