ch.22%20solutions%20in%20leasing

ch.22%20solutions%20in%20leasing - Ch.22 Solutions in...

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Ch.22 Solutions in Leasing 1N e w t r u c k Insurance and maintenance costs are discounted with after-tax borrowing rate because they are f xed obligation throughout the lease period. Salvalge value is discounted with the after-tax cost of capital because it is uncertain with an expected value. After-tax cost of borrowing: k =0 . 1 × (1 0 . 4) = 0 . 06 . NAL = P L 1+ 1 1 (1+ k ) n 1 k + LT Ã 1 1 (1+ k ) n k ! UCC μ dT d + k 1+0 . 5 k 1+ k + C (1 T ) Ã 1 1 (1+ k ) n k ! S (1 + r ) n + S μ dT d + r 1 (1 + r ) n =5 0 , 000 10 , 000 1+ 1 1 (1+0 . 06) 5 0 . 06 +10 , 000 × 0 . 4 × 1 1 (1+0 . 06) 6 0 . 06 50 , 000 × 0 . 3 × 0 . 4 0 . 06 + 0 . 3 μ 1+0 . 5 × 0 . 06 1+0 . 06 + 750 (1 0 . 4) 1 1 (1+0 . 06) 6 0 . 06 2 , 000 1 . 015 6 +2 , 000 × μ 0 . 3 × 0 . 4 0 . 3+0 . 15 1 1 . 15 6 =1 7 , 545 . 66 13 , 982 . 17 634 . 08 = 2 , 929 . 41
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2L e a s e p a y m e n t s (a) Minimum lease payment acceptable to the lessor: WACC
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This note was uploaded on 12/12/2010 for the course FNCE FNCE 3P93 taught by Professor Nd during the Fall '10 term at Brock University, Canada.

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ch.22%20solutions%20in%20leasing - Ch.22 Solutions in...

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