Business, 20.12.2019 20:31 dustin112000

If a firm can buy a machine for $80,000, takes an investment tax credit of 15%, and lease out the machine for 9 years with lease payments at the beginning of the year,

how much should the minimum annual lease payments be? assume a 5-year straight-line depreciation, zero salvage and a tax rate of 35%. assume further that it can borrow at a before-tax rate of 7%.

a $10,300
b $8,300
c $9,300
d $9,600
e $8,900

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