Lease Analysis Is Affected by Assumptions About the Asset Pool

question 48

Essay

Lease analysis is affected by assumptions about the asset pool in which the leased asset is kept.Explain how the results of such analysis would be different if the asset was alone or if many assets in it pool at the end of a lease contract.Consider the situation where the tax rate is 40%, CCA = 30% and the discount rate were 10%, and the difference between UCC and salvage were $10,000.

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