LeaseAfric Ltd. is considering the purchase of a fleet of cars for $337,500.00. It can borrow at 7.5%. The cars will be used for 4 years. The corporate tax rate is 35% and the cars belong in a 30% CCA class. Assuming beginning of period payments and no salvage value, what is the break-even lease payment? a) $102,422.43 b) $96,328.32 c) $110,104.11 d) $91.632.31 e) $101,024.32

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 9P
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LeaseAfric Ltd. is considering the purchase of a fleet of cars for $337,500.00. It can
borrow at 7.5%. The cars will be used for 4 years. The corporate tax rate is 35% and
the cars belong in a 30% CCA class. Assuming beginning of period payments and no
salvage value, what is the break-even lease payment?
a) $102,422.43
b) $96,328.32
c) $110,104.11
d) $91.632.31
e) $101,024.32
Transcribed Image Text:LeaseAfric Ltd. is considering the purchase of a fleet of cars for $337,500.00. It can borrow at 7.5%. The cars will be used for 4 years. The corporate tax rate is 35% and the cars belong in a 30% CCA class. Assuming beginning of period payments and no salvage value, what is the break-even lease payment? a) $102,422.43 b) $96,328.32 c) $110,104.11 d) $91.632.31 e) $101,024.32
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