Problem 2 1 - 1 0 Leasing and Salvage Value The Wildcat Company trying to decide whether
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Problem Leasing and Salvage Value The Wildcat Company trying to decide whether to lease or buy new computer assisted drilling system for its oll exploration businessManagement has decided that it must use the system to stay competitivewill provide $ million in annual pretax cost savings. The system costs $ million and will be depreciated straightline to zero over five yearsWildcat's tax rate is percent and the firm can borrow at percent Lambert's policy is to require its lessees to make payments at the start of the year Suppose it is estimated that the equipment will have an aftertax residual value of $ at the end of the lease What is the maximum lease payment acceptable to Wildcat Do not round intermediate calculations and enter your answer in dollars not millions of dollars rounded to decimal places eg Lease payment
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