Buy Van Lease Van Buy/Lease Term Depreciation Term Tax Rate Interest Rate $31,648 $14,065 Per Year 3 Years 10 Years 21.0% 7.8%

Quickbooks Online Accounting
3rd Edition
ISBN:9780357391693
Author:Owen
Publisher:Owen
Chapter6: Investing And Financing Activities
Section: Chapter Questions
Problem 4.6C
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What is the NPV of leasing versus buying?
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Transcribed Image Text:What is the NPV of leasing versus buying? Enter a response then click Submit below $0 Submit
Buy Van
Lease Van
Buy/Lease Term
Depreciation
Term
Tax Rate
Interest Rate
After-Tax
Interest Rate
Buy
Year
Payment
Depreciation
Tax Deduction
Net Payment
Lease
Year
Payment
Tax Deduction
Net Payment
$31,648
$14,065 Per Year
3 Years
1
10 Years
21.0%
7.8%
6.2%
$12,236
$3,165
$665
$11,571
1
$14,065
$2,954
$11,111
2
$12,236
$3,165
$665
$11,571
2
$14,065
$2,954
$11,111
3
$12,236
$3,165
$665
$11,571
3
$14,065
$2,954
$11,111
Transcribed Image Text:Buy Van Lease Van Buy/Lease Term Depreciation Term Tax Rate Interest Rate After-Tax Interest Rate Buy Year Payment Depreciation Tax Deduction Net Payment Lease Year Payment Tax Deduction Net Payment $31,648 $14,065 Per Year 3 Years 1 10 Years 21.0% 7.8% 6.2% $12,236 $3,165 $665 $11,571 1 $14,065 $2,954 $11,111 2 $12,236 $3,165 $665 $11,571 2 $14,065 $2,954 $11,111 3 $12,236 $3,165 $665 $11,571 3 $14,065 $2,954 $11,111
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