Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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An asset costs $640,000 and will be depreciated in a straight-line manner over its four-year life. It will have no salvage value. The lessor can borrow at 6 percent and the
lessee can borrow at 6 percent. If the lessor is in the 30 percent tax bracket and the lessee falls in 10 percent tax bracket. For what range of lease payments does the
lease have a positive NPV for the lessee? Select an answer that is closest to yours.
O Lease payment < $184,630.61
O Lease payment < $220,186.17
O Lease payment > $234,483.02
O Lease payment > $166,167.55
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Transcribed Image Text:An asset costs $640,000 and will be depreciated in a straight-line manner over its four-year life. It will have no salvage value. The lessor can borrow at 6 percent and the lessee can borrow at 6 percent. If the lessor is in the 30 percent tax bracket and the lessee falls in 10 percent tax bracket. For what range of lease payments does the lease have a positive NPV for the lessee? Select an answer that is closest to yours. O Lease payment < $184,630.61 O Lease payment < $220,186.17 O Lease payment > $234,483.02 O Lease payment > $166,167.55
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