A lease has a term of 3 years and annual payments of $25,000.The leased asset would cost $74,000 to buy and would be depreciated straightline to a zero salvage value over 3 years.The actual salvage value is negligible.The lessee can borrow at a rate of 12 percent and has a tax rate of 21 percent.What is the incremental cash flow of purchasing instead of leasing for Year 3 from the lessee's perspective?

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The Answer of A lease has a term of 3 years and annual payments of $25,000.The leased asset would cost $74,000 to buy and would be depreciated straightline to a zero salvage value over 3 years.The actual salvage value is negligible.The lessee can borrow at a rate of 12 percent and has a tax rate of 21 percent.What is the incremental cash flow of purchasing instead of leasing for Year 3 from the lessee's perspective?

A Lease Has a Term of 3 Years and Annual