Your firm is considering leasing a new laser light. The lease lasts for 3 years. The lease calls for
Your strong is because leasing a new laser unsubstantial. The lease lasts for 3 years. The lease calls for 4 before-tax payments of $12,000 per year following a while the highest acquittal occurring without-delay.
The computer would require $45,000 to buy and would be straight-line depreciated to a naught salvage appreciate balance 3 years. The highest derogation succeed be recorded in year 1. The strong would not want the laser unsubstantial following three years. The bargain appreciate is 0 at the end of three years. The strong's WACC is 20%. The strong succeed take a new advance at an profit admonish of 10% to finance the escheatment if they issue to own the utensilry. Highest profit acquittal would start at the end of highest year and be remunerated annually following that.
The corpoadmonish tax admonish is 40%.
What is the withhold abatement admonish for valuing the lease vs owning following-tax CFs?
What is the following-tax capital issue from leasing in year 0?
What's the NPV of all following-tax leasing CFs?
What is the CF from derogation tax savings from owning the utensil in year 1?