What is its present value

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A financial lease has the following characteristics: Asset cost: $10,000; tax rate: 30 percent; CCA rate: 20 percent; after-tax cost of capital: 15 percent, lease term: 4 years, with $2,500 annual lease payments and tax shields in advance, and salvage and UCC tax shields in Year 4. Salvage is zero. The asset is part of a large pool. What important timing considerations should an analyst watch for in this analysis? What is its present value?

Reference no: EM131710586

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