ws what is correct and incorrect for the work you have completed so far work you
ID: 2620720 • Letter: W
Question
ws what is correct and incorrect for the work you have completed so far work you have done so far is correct, you may not have completed everything 14.28 points Acme has branched out to rentals of office furniture to start-up companies. Desks last for six years and depreciated on a five-year MACRS schedule. Assume administrative costs are $ can be $330 per desk at the beginning ed a of each year The cost of capital is 10% and the tax rate is 34% Lease payments are made in advance hate year The inflation rate is zero Suppose a blue-chip company requests a six-year financial at the start of each lease for a $4.300 desk. The company has just issued five -year notes at an interest rate of 7% per year What is the break-even lease rate in this case? (Do not round intermediate ealculations. Round your jeimal answer to 2 decimal places.) Break-even rate s DELL FB F1M 54 5 6Explanation / Answer
Statement showing depreciation
Statement showing calculation of break even lease
2.752X-2724.9 = 0
2.752X = 2724.9
X = 990.15$
Thus lease payment = 990.15$
Year Opening balance Depreciation rate Depreciation = Cost basis* depreciation rates Closing balance 1 4300 20.00% 860 3440 2 3440 32.00% 1376 2064 3 2064 19.20% 826 1238.4 4 1238.4 11.52% 495 743.04 5 743.04 11.52% 495 247.68 6 247.68 5.76% 248 0Related Questions
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