question archive An asset costs $630,000 and will be depreciated in a straight-line manner over its three-year life
An asset costs $630,000 and will be depreciated in a straight-line manner over its three-year life
Subject:AccountingPrice: Bought3
An asset costs $630,000 and will be depreciated in a straight-line manner over its three-year life. It will have no salvage value. The lessor can borrow at 6 percent and the lessee can borrow at 9 percent. The corporate tax rate is 21 percent for both companies.
b.Assume that the lessee pays no taxes and the lessor is in the 21 percent tax bracket. For what range of lease payments does the lease have a positive NPV for both parties?
