Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Asset cost
600,000
LESSE PROBLEM
Interest rate
Lease rental payment
Annual depreciation
Tax rate
12%
140,000
100,000
40%
Year
After-tax cash flows from leasing
After-tax lease rental
0
-84000
-600000
-600000
516000
8.30%
buy
Asset cost
Interest rate
Lease rental payment
Annual depreciation
Tax rate
Year
After-tax cash flows from leasing
After-tax lease rental
600,000
12%
135,991
100,000
40%
0
81595
-600000
-600000
-518405
7.46%
Turbine cost
Greenville's borrowing rate
Lease payment
10,000,000
6.00%
1,800,000
Year
Lessee after-tax lease costs
After-tax lease rental
-1,800,000
-1800000
-10,000,000
-10,000,000
8200000
3%
0
0
-1800000
Exercise
Q1 Part A
Asset cost
Depreciation 1-5 years
Rental payments
Tax rate
Cost of capital
Year
10,000,000
1,800,000
2,000,000
6.00%
40%
0
1080000
1
1080000
-10,000,000
800000
-10,000,000
800,000
-8,920,000 1,880,000
4.30%
1000000
200000
300000
40%
10%
0
Leasing
After tax leas rental
BUY
Cost
Tax shield
Total
Lease - Buy
IRR
Decision
-180000
-1000000
-1000000
820000
19.17%
80000
80000
-260000
BUY
Q1 Part B
Asset cost
Depreciation 1-5 years
Rental payments
Tax rate
Cost of capital
1000000
200000
299977.8689
40%
10%
Year
Leasing
After tax leas rental
BUY
Cost
Tax shield
Total
Lease +Buy
IRR
Decision
-180000
179986.7213 179986.72
-1000000
80000
-1000000
80000
-820013.2787 259986.72
19.16%
BUY
Muntazir Hussain
-84000
-84000
-84000
-84000
-84000
40000
40000
40000
40000
40000
40000
40000
40000
40000
40000
40000
40000
-124000
-124000
-124000
-124000
-124000
-40000
81595
81595
81595
81595
81595
40000
40000
40000
40000
40000
40000
40000
40000
40000
40000
40000
40000
121595
121595
121595
121595
121595
40000
or
0
0
0
0
0
0
0
0
-1800000 -1800000 -1800000 -1800000
0
0
0
2
1080000
5
1080000
6
0
800000
800000
800000
800000
800,000 800,000 800,000 800,000
1,880,000 1,880,000 1,880,000 1,880,000
800000
800,000
800,000
3
1080000
4
1080000
-180000
-180000
-180000
-180000
80000
80000
-260000
80000
80000
-260000
80000
80000
-260000
80000
80000
-260000
80000
80000
-80000
80000
80000
80000
80000
80000
80000
80000
80000
259986.7 259986.7 259986.7 259986.7
80000
80000
80000