Question: please do all thank you. drop downs are included below and in order 2. Evaluation by the lessor Both the lessee and the lessor conduct






2. Evaluation by the lessor Both the lessee and the lessor conduct an analysis to evaluate if the potential lease agreement will be mutually beneficial or not. Suppose you work as a leasing manager at a professional feasing company and you're working on a deal where the equipment to be leased requires an initial outiay of $90,000 with a lease term of four years. You will be depreciating the equipment on a straight-line basis with an amount of $22,500 per year down to a salvage value of $0. However, the actual salvage value of the equipment is expected to be $18,000 at the end of the lease term. In your analysis youli treati the salvage value as a recapture of the depreciation and tax it at a margiral rate of 30%, Your cornpany expects an afteritax rate of retum of 11 in in all deal evaluations. As a leasing manager you would conduct a three-step process in your analysis. Complete the different elements involved in the analysis. Step it Calculate the arnount to be amortoted in the deal. Note: Round your Prewent value anwwers to two decimals places and amortized amount to whole number. Step 2: Calculate the after-tax lease income requirement considering that lease payments are made in the beginning of the year. The annual after-ax lease income to the lessor is Step 3: Calculate before-tax lease payment to be made by the lessee. The lease payment required from the lessee is Step 3: Calculate before-tax lease payment to be made by the lessee. The lease payment required from the lessee is Amortization Amount Calculations Initial Outlay $90,000 Less: Present value of after-tax salvage Less: Present value of depreciation tax sheiter Amount to be amortized Step 2: Calculate the after-tax lease income require $20,941.51 fing that lease payments are made in the beginning of the year. The annual after-tax lease income to the lessor is $2,363,36 Step 3: Calculate before-tax lease payment to be made by the lessee. The fease poyment required from the lessee is The lease payment required from the lessee is Amortization Amount Calculations Initial Outiay Less: Present value of after-tax saivage Less: Present value of depreciation tax sthelter Amount to be amortized Step 2: Calculate the after-tax lease income requi $28,016.04 fring that lease payments are made in the beginning of the year. The annual after-tax lease income to the lessor is Step 3: Calculate before-tax lease payment to be made by the lessee. The lease payment required from the lessee is Amortization Amount Calculations Initial Outiay $90,000 Less: Present value of after-tax salvage Less: Present value of depreciation tax shejter Amount to be amortized Step 2: Calculate the after-tax lease income re $27,977.00 sidering that lease payments are made in the beginning of the year. The annual after-tax lease income to the lessor Step 3: Calculate before-tax lease payment to 2. lessee. The lease payment required from the lessee is
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