What is the npv of the lease

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Your firm is considering leasing a new photocopier. The leaselasts for nine years. The lease calls for 10 payments of $1,000 peryear with the first payment occurring immediately. The copier wouldcost $8,100 to buy and would be depreciated using the straight-linemethod to zero salvage over nine years. The firm can borrow at arate of 8%. The corporate tax rate is 30%. What is the NPV of the lease? Correct Answer: $686.00. Please show the formula & explain your calculations.

Reference no: EM131090099

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