Use the table for the question(s)below.
Your firm is a lessor that is planning to buy some new equipment and offer it to another firm through a lease arrangement.You have calculated the above cash flows for a potential lease you might offer.
-If your firm's borrowing cost is 3% and the tax rate is 45%,what is the NPV of buying and leasing?
A)$20,479
B)$15,069
C)-$20,479
D)-$15,069
E)-$14,145

Question

Use the table for the question(s)below.
  Your firm is a lessor that is planning to buy some new equipment and offer it to another firm through a lease arrangement.You have calculated the above cash flows for a potential lease you might offer.
-If your firm's borrowing cost is 3% and the tax rate is 45%,what is the NPV of buying and leasing?
A)$20,479 
B)$15,069 
C)-$20,479 
D)-$15,069 
E)-$14,145

Quizplus · Accepted Answer

The NPV of buying and leasing can be influenced by the firm's borrowing cost and the tax rate, but without specific details on the cash flows, initial investment, or the terms of the lease, it's impossible to calculate the exact NPV. However, if option A is presented as the correct answer, it suggests a scenario where the calculations based on given financial metrics (borrowing cost and tax rate) lead to a positive NPV of $20,479, indicating a beneficial investment or leasing decision.

Use the Table for the Question(s)below