You work for a chemical company which needs a new distillation unit. The unit costs $100,000, must be replaced in five years, and is worthless at that time. It falls under Class 8 (CCA rate 20%). The firm can borrow at 10.5%. The equipment can be leased for $25,000. The tax rate is 30%.

What is the after-tax lease payment?

Question

You work for a chemical company which needs a new distillation unit. The unit costs $100,000, must be replaced in five years, and is worthless at that time. It falls under Class 8 (CCA rate 20%) . The firm can borrow at 10.5%. The equipment can be leased for $25,000. The tax rate is 30%.

What is the after-tax lease payment?

What is the after-tax lease payment?

Quizplus · Accepted Answer

The Answer of You work for a chemical company which needs a new distillation unit. The unit costs $100,000, must be replaced in five years, and is worthless at that time. It falls under Class 8 (CCA rate 20%). The firm can borrow at 10.5%. The equipment can be leased for $25,000. The tax rate is 30%.

What is the after-tax lease payment?

You Work for a Chemical Company Which Needs a New