Question: TigerCorp plans to add a new internet server, which has a price of $ 2 . 5 million. TigerCorp expects that the internet server will
TigerCorp plans to add a new internet server, which has a price of $ million. TigerCorp expects that the internet server will be worthless after three years. The marginal tax rate for TigerCorp is The tax authority approves that the new internet server can use the accelerated depreciation: TigerCorp can depreciate and of the value of the internet server in the next three years. Assume that the cost of debt for TigerCorp is and its cost of equity is If TigerCorp uses this internet server through a true tax lease for three years, instead of direct purchasing, the annual lease payments will be $ million. The amount of the leaseequivalent loan is closest to:
Select one:
a $ million
b $ million
c $ million
d $ million
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