What is the present value of an operating lease that involves payments of $25,000 per year (the end of the year) for 10 years with no possibility of purchase at the end of the lease term.Assume that the firm is in the 40% marginal tax rate and the pre-tax cost of debt for the firm is 10%?
A) $184,002.18
B) $92,168.51
C) $110,401.31
D) $153,614.18
Correct Answer:
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