If annual lease payments for a firm are $26,000, calculate the after-tax lease payments, given that the marginal tax rate is 35 percent.

Question

Quizplus · Accepted Answer

To calculate after-tax lease payments, we need to multiply the lease payments by (1 - marginal tax rate). 
Therefore, after-tax lease payments = $26,000 x (1 - 0.35) = $26,000 x 0.65 = $16,900. 
The correct option is B) $20,540, as this is not the correct calculation.

If Annual Lease Payments for a Firm Are $26,000, Calculate