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Quartz Corporation is a relatively new firm. Quartz has experienced enough losses during its early years...

Quartz Corporation is a relatively new firm. Quartz has experienced enough losses during its early years to provide it with at least eight years of tax loss carryforwards. Thus, Quartz’s effective tax rate is zero. Quartz plans to lease equipment from New Leasing Company. The term of the lease is six years. The purchase cost of the equipment is $990,000. New Leasing Company is in the 40 percent tax bracket. There are no transaction costs to the lease. Each firm can borrow at 12 percent. a. What is Quartz’s reservation price? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Reservation price $ b. What is New Leasing Company’s reservation price? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Reservation price $

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The computation of the Quartz’s reservation price and the New Leasing Company’s reservation price is to be shown in the excel spreadsheet. kindly find it below:

Following formulas need to be used

jeff jeffy answered 1 year ago
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