What Is the Present Value of an Operating Lease That

question 22

Multiple Choice

What is the present value of an operating lease that involves payments of $5,000 per year (the end of the year) for 10 years with no possibility of purchase at the end of the lease term.Assume that the firm is in the 40% marginal tax rate and the pre-tax cost of debt for the firm is 8%?

• A) $38,986.43
• B) $23,391.86
• C) $20,130.24
• D) $18,000.00

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Cells

The basic structural, functional, and biological units of all living organisms, serving as the building blocks of life.

Divide

To separate or split something into parts or to share among several.

Universal Design

The creation of settings and equipment that can be used by everyone, whether or not they are able-bodied and sensory-acute.

Able-bodied

Describes a person who does not have a disability and is capable of performing various physical tasks and activities.