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

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

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Ch.22 Solutions in Leasing 1 New truck Insurance and maintenance costs are discounted with after-tax borrowing rate because they are fi 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 = 50 , 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 = 17 , 545 . 66 13 , 982 . 17 634 . 08 = 2 , 929 . 41 Lease 1
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2 Lease payments (a) Minimum lease payment acceptable to the lessor: WACC ( r ) is used to discount the salvage value. After-tax cost of borrowing: k = 0 . 1 × (1 0 . 45) = 0 . 055 NAL = P L 1 + 1 1 (1+ k ) n 1 k + LT
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