Question: Question is complete. Please help me solve this. Present value of the after-tax lease payments options are: 1. $14,933.94 2. $9,937.45 3. $9,707.06 Present value
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. Matata's tax rate is 35%. CCA rate on the equipment is 30%. Matata'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 O $920.09 $1,062.17 $1,883.77
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