How is the effect of a recapture calculated in a lease-or-purchase analysis?
A) Recapture x CCA rate
B) Recapture x discount rate
C) Recapture x cost of borrowing rate
D) Recapture x tax rate

Question

Quizplus · Accepted Answer

The effect of a recapture in a lease-or-purchase analysis is calculated by multiplying the recapture by the tax rate, as recapture is considered taxable income.

How Is the Effect of a Recapture Calculated in a Lease-Or-Purchase