Estimate the asset value

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Suppose you observe a firm paying $27,113/year in rental expenses on assets that have a 16 year life, and the cost of secured debt to purchase these assets is currently 5.63%. Show how you would 1) Estimate the asset value 2) Estimate the leasing interest and 3) leasing depreciation 4) Finally, explain in words and using dollars how the decision to lease instead of purchase assets has impacted operating profit (EBIT) and net income.

Reference no: EM132509221

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