Here is the synopsis of our sample research paper on Leases R Us. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
A 2 page solution to a problem determining the lease payment for a piece of machinery with a functional life of 5 years. The solution provides the present value of the lease allowing for the depreciation tax shield and real salvage value to determine the annual lease payment, adjusted for tax effects. An additional 3 page section includes a partial solution to another problem involving finding standard deviation, correlation and beta in preparation for determining whether the CAPM equation results in accurate pricing of several securities. Bibliography lists 1 source.
Page Count:
2 pages (~225 words per page)
File: CC6_KSfinLeaseRus.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
(LRU) has been contracted by Robotics of Beverly Hills (RBH) to provide lease financing for a machine that would assist in automating a large part of their current assembly line.
Annual lease payments will start at the beginning of each year. The purchase price of this machine is $200,000, and it will be leased by RBH for a period of
5 years. LRU will utilize straight line depreciation of $40,000 per year with a zero book salvage value. However, salvage value is estimated to actually be $35,000 at the end
of 5 years. LRU is required to earn a 14%, after-tax rate of return on the lease. LRU uses a marginal tax rate of 40%. Calculate the annual lease payments.
(Remember, these payments are to be considered at the beginning of each year-annuity due.)" Step A. Amount to be
amortized Cash Flows Discount Rate Factor 14% Total Present Value At end of year 0 1
2 3 4 5 6 Outgoing 200,000 1 -200,000 200,000 Depreciation
0.8772 35,088 40,000
0.7695 30,780 40,000 0.675 27,000 40,000 0.5921 23,684 40,000
0.5194 18,179 40,000 134,731
...