ABC LeasingABC Leasing has an after-tax cost of borrowing of 10%. The company is in a 35% tax bracket. A new machine will be purchased for $100,000. The straight-line method is used to calculate depreciation. With heavy use, the salvage value is zero. The firm now wants to rent out this machine for 5 years at a required return of 15%. The first lease payment starts once the contract has been signed. Furthermore, lease payments received by the lessor are fully taxable.
-Refer to Scenario: ABC Leasing.What is the required annual lease payment that the lessor must charge?

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The Answer of ABC LeasingABC Leasing has an after-tax cost of borrowing of 10%. The company is in a 35% tax bracket. A new machine will be purchased for $100,000. The straight-line method is used to calculate depreciation. With heavy use, the salvage value is zero. The firm now wants to rent out this machine for 5 years at a required return of 15%. The first lease payment starts once the contract has been signed. Furthermore, lease payments received by the lessor are fully taxable.
-Refer to Scenario: ABC Leasing.What is the required annual lease payment that the lessor must charge?

ABC LeasingABC Leasing Has an After-Tax Cost of Borrowing of 10