Question
Your company has to obtain some new production equipment to be used for the next ten years, and leasing is being considered. You have been directed to perform an after-tax study of the leasing approa…
Lease period, t- 10 years 30% 10% tax-I MARR = | 10 -53,000 15,900 51,100-44,100 37,100-37,100l -37,100-37,10037,100-37,100-37,100 37,100 5 Year 6 Lease and other costs 7 Income tax 8 After-Tax Cash Flow 2 73,000-63,000 18,900 4 53,000 15,900 53,000 15,900 53,000 -53,000 15,900 53,000 15,900 53,000 15,900 53,000 21,900 15,900 15,900
Lease period, t10 taxz 0.3 MARR 0.1 years 4 5 Year 6 Lease and other costs 7 Income tax 8 After-Tax Cash Flow 2 4 10 73000 63000 53000 53000 53000 53000 53000 53000 53000 53000 E6-E7 -F6-F7 -G6-G7 H6-H7 16-17 6-17 K6-K7
Lease period, t- 10 30% 10% years tax- MARR = | 10 5 Year 6 Lease and other costs 7 Income tax 8 After-Tax Cash Flow 2 4 000-53,000-5 53,000-53,000-53, 000-53,000-5 53,000-53,000 73,000-63,00053, 21,900-18, 51,100-44,100-37,1 900-15,90015, 90015,9001 15,90015,9001 -37,1 15,90015,90015, 100 37,100-37,100-37,100 100 37,100-37,100-37,100 10 11 (P/F,10%,t) 12 PWIt)"(P/F,10%,t) 13 14 Pw.ΣΡΝ(t)"(P/F,10%,t) 15 0.9091 0.82640.7513 0.6830 0.6209 0.5645 0.51320.4665 0.4241 0.3855 14,304 -46,455 6,446 -27,874-25,340 -23,03620,94219,038 -17,30715,7341 |-246,476
B. Lease period, t10 tax-0.3 MARR- 0.1 years 10 5 Year 6 Lease and other costs 7 Income tax 8 After-Tax Cash Flow 73000 63000 -C6"$852 -C6-C7 53000 53000 53000 53000 53000 -16 $B$2 -16-17 53000 53000 -G6-G7 -B6-B7 -D6-D7 -E6-E7 -F6-F7 -H6-H7 6-17 -K6-K7 10 11 (P/F,10%,t) 12 Pw(t)"(P/F,10%,t) 13 14 I Pw 2Pw(t) *(P/F,1096,t) EsUM(B12:K12) 15 1+$B$3 -B8 B11 -C8* C11 -G8 G11 -H8 H11 -D8 D11 E8 E11 -F8 F11 J8*111