In: Finance
Your firm is considering leasing a new computer. The lease lasts for 9 years. The lease calls for 9 payments of $1,000 per year. The computer would cost $7,650 to buy and would be straight-line depreciated to a zero salvage value over 9 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 8%. The corporate tax rate is 30%. What is the NPV of the lease relative to the purchase (NAL)?
Group of answer choices
$360.22
$1,039.78
$6,610.22
$339.78
Correct answer: $1,039.78
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -