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If the After-Tax Present Value of Buying Equipment and Using

Question 3

Multiple Choice

If the after-tax present value of buying equipment and using it for six years is $100,000,calculate the break-even after-tax yearly lease payment (seven payments) using a 7% real discount rate.(Assume that lease payments are made at the beginning of the year and zero inflation.)


A) $14,286
B) $17,341
C) $18,555
D) $19,607

Correct Answer:

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