Al-Tek is considering leasing some new equipment for 5 years with annual payments. The equipment would cost $115,000 to buy and would be depreciated straightline to a zero salvage value. The actual salvage value is zero. The applicable pretax borrowing rate is 8 percent. The lessee does not expect to owe taxes for several years. The lessor's tax rate is 21 percent. What is the minimum lease payment that will be acceptable to both parties?
A) $28,603.33
B) $28,745.16
C) $27,750.00
D) $22,708.67
E) $26,709.12
B) $28,745.16
You might also like to view...
Free cash flow is the ________
A) cash flow from assets B) remaining cash free to distribute to creditors and owners of the firm C) cash that a company generates to operate the company D) All of the above
If Genco's preferred stock pays a dividend of $5 per share and its investors require an 8% return, what should its price per share of preferred stock be?
A) $50.00 B) $.40 C) $62.50 D) $6.25 E) $12.75
Under a contract for the sale of land, the statute of frauds A) does not apply if the purchase price for the land is less than $500
B) does not apply if the buyer must secure a loan for the purchase of the land. C) requires the defendant to sign the agreement. D) does not apply if the total price of the land is to be paid in less than one year.
All of the following are steps in the budgetary control process except:
A. Communicate differences to supervisors to facilitate promotion decisions. B. Compare actual results to budgeted amounts and analyze differences. C. Develop the budget from planned objectives. D. Establish new objectives and a new budget. E. Take corrective and strategic actions.