An asset costs $910,000 and will be depreciated in a straight-line manner over its three- year life. It will have no salvage value. The corporate tax rate is 23 percent and the appropriate interest rate is 6 percent. a. What would the lease payment have to be to make both the lessor and lessee indifferent about the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume that the lessee pays no taxes and the lessor pays taxes. For what range of lease payments does the lease have a positive NPV for both parties? (Enter your answers from lowest to highest. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Lease payment b. Lease payment range to
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- An asset costs $900,000 and will be depreciated in a straight-line manner over its five-year life. It will have no salvage value. The corporate tax rate is 22 percent and the appropriate interest rate is 9 percent. a. What would the lease payment have to be to make both the lessor and lessee indifferent about the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume that the lessee pays no taxes and the lessor pays taxes. For what range of lease payments does the lease have a positive NPV for both parties? (Enter your answers from lowest to highest. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)An asset costs $920,000 and will be depreciated in a straight-line manner over its four- year life. It will have no salvage value. The corporate tax rate is 24 percent and the appropriate interest rate is 7 percent. a. What would the lease payment have to be to make both the lessor and lessee indifferent about the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume that the lessee pays no taxes and the lessor pays taxes. For what range of lease payments does the lease have a positive NPV for both parties? (Enter your answers from lowest to highest. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Lease payment b. Lease payment range toAn asset costs $840,000 and will be depreciated in a straight-line manner over its five- year life. It will have no salvage value. The corporate tax rate is 21 percent and the appropriate Interest rate is 7 percent. a. What would the lease payment have to be to make both the lessor and lessee Indifferent about the lease? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume that the lessee pays no taxes and the lessor pays taxes. For what range of lease payments does the lease have a positive NPV for both parties? (Enter your answers from lowest to highest. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Lease payment b. Lease payment range to
- An asset costs $640,000 and will be depreciated in a straight-line manner over its four-year life. It will have no salvage value. The lessor can borrow at 6 percent and the lessee can borrow at 6 percent. If the lessor is in the 30 percent tax bracket and the lessee falls in 10 percent tax bracket. For what range of lease payments does the lease have a positive NPV for the lessee? Select an answer that is closest to yours. O Lease payment $166,167.55 O Lease payment > $234,483.02An asset costs $640,000 and will be depreciated in a straight-line manner over its four-year life. It will have no salvage value. The lessor can borrow at 6 percent and the lessee can borrow at 6 percent. If the lessor is in the 30 percent tax bracket and the lessee falls in 10 percent tax bracket. For what range of lease payments does the lease have a positive NPV for the lessee? Select an answer that is closest to yours. Group of answer choices Lease payment < $220,186.17 Lease payment < $184,630.61 Lease payment > $166,167.55 Lease payment > $234,483.02An asset costs $640,000 and will be depreciated in a straight-line manner over its four-year life. It will have no salvage value. The lessor can borrow at 6 percent and the lessee can borrow at 6 percent. If the lessor is in the 20 percent tax bracket and the lessee pays no taxes. For what range of lease payments does the lease have a positive NPV for both parties? Between $184,561 and $184,699 Between $179,650 and $184,699 Between $179,650 and $184,561 The range does not exist
- x Your answer is incorrect. Suppose that in addition to the $66,899 annual rental payments, Kimberly-Clark is also required to pay $5,000 for insurance costs each year on the building directly to the lessor, Carla Vista Storage. How would this executory cost affect the initial measurement of the lease liability and right-of-use asset? (Round answer to 0 decimal places, e.g. 5,275.) Lease liability $ 522467On December 31, 2024, Cullumber Company leased machinery from Ivanhoe Corporation for an agreed - upon lease term of 3 years Cullumber agreed to make annual lease payments of $22, 000, beginning on December 31, 2024. The expected residual value of the machinery at the end of the lease term is $11,000. Your answer is incorrect. Cullumber guarantees a residual value of $11,000 at the end of the lease term. What if the expected residual value at the end the lease term is $8,000 and Cullumber guarantees a residual of $11,000 ? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5, 275.) Click here to view factor tables. Lease liability $Use the information for Escapee Company from BE21.20. Assume the same facts, except Escapee guarantees a residual value of $9,000 at the end of the lease term, which equals the expected residual value of the machinery. (a) Does this change your answer from BE21.20? (b) What if the expected residual value at the end of the lease term is $5,000 and Escapee guarantees a residual of $9,000?
- 3.) a.) The decision as to whether to sell the Western House should be made by comparing the investor's required return with the expected return from retaining the property. The information provide below is to derive a terminal value at the end of lease at 5 years. Duration Cashflow (891,000) 75,000 89,000 75,000 89,000 150,000 Year 0 028 Year 1 Year 2 Year 3 Year 4 Year 5 Calculate the total NPV (Net Present Value) of the scheme and confirm if the scheme is viable or not, using a discount rate of 8%.A lessor acquired equipment for $82,100 and plans to lease it for a period of five years. If the equipment has no estimated residual value, what must be the annual lease charge for the lessor to earn 10 percent on the investment? Use Appendix D to answer the question. Round your answer to the nearest dollar. $ What would be the annual lease charge if the lessor sought to earn 8 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar. $ If the equipment will have a residual value of $10,500, what lease payment will earn the lessor 10 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $Reynolds Construction (RC) needs a piece of equipment that costs 200. RC can either lease the equipment or borrow 200 from a local bank and buy the equipment. Reynoldss balance sheet prior to the acquisition of the equipment is as follows: a. (1) What is RCs current debt ratio? (2) What would be the companys debt ratio if it purchased the equipment? (3) What would be the debt ratio if the equipment were leased and the lease not capitalized? (4) What would be the debt ratio if the equipment were leased and the lease were capitalized? Assume that the present value of the lease payments is equal to the cost of the equipment. b. Would the companys financial risk be different under the leasing and purchasing alternatives?