fm3_problems07 - Exercise 1 BASIC LEVERAGED LEASE EXAMPLE...

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Exercise 1 Page 1 BASIC LEVERAGED LEASE EXAMPLE cost of asset 1,000,000 lease term 15 residual value 300,000 equity 200,000 debt interest 10% annual debt payment 105,179 annual rent received 110,000 tax rate 40% principal rental or at start loan year equity invested salvage depreciation of year payment 0 -200,000 1 110,000 66,667 800,000 105,179 2 110,000 66,667 774,821 105,179 3 110,000 66,667 747,124 105,179 4 110,000 66,667 716,657 105,179 5 110,000 66,667 683,144 105,179 6 110,000 66,667 646,280 105,179 7 110,000 66,667 605,728 105,179 8 110,000 66,667 561,122 105,179 9 110,000 66,667 512,056 105,179 10 110,000 66,667 458,082 105,179 11 110,000 66,667 398,711 105,179 12 110,000 66,667 333,403 105,179 13 110,000 66,667 261,565 105,179 14 110,000 66,667 182,542 105,179 15 110,000 66,667 95,617 105,179 16 300,000 MPM 4.18% <-- Solved by Solver IRR 4.18% CALCULATING THE MULTIPLE-PHASES METHOD (MPM) RETURN--REQUIRES SOL investment at attribution of cash flow year beginning of year cash flow income investment 1 200,000 19,488 8,357 11,131 2 188,869 18,480 7,892 10,588 3 178,281 17,373 7,450 9,923 4 168,358 16,154 7,035 9,119 5 159,239
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This note was uploaded on 01/23/2011 for the course FGB 780 taught by Professor Edwardchang during the Spring '09 term at Missouri State University-Springfield.

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fm3_problems07 - Exercise 1 BASIC LEVERAGED LEASE EXAMPLE...

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