What are the required annual beginning-of-year lease payment

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Reference no: EM133379982

Question: Starcourt Leasing has been approached by USA Logistics Company (USALC) to provide lease financing for a fleet of new semi-trailer trucks. Each truck will cost $240,000 and will be leased by USALC for 5 years with lease payments made at the beginning of each year. Starcourt will depreciate the trucks on a straight-line basis to $0 but the actual market value at the end of 5 years is estimated to be $60,000. What are the required annual beginning-of-year lease payments if Starcourt desires to earn a 17% after-tax rate of return? Assume a marginal tax rate of 25%.

Reference no: EM133379982

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