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    Problems 1,3,7: Input Boxes in Tan

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    Talha Bin Asim
    The document contains instructions and templates for solving finance problems related to lease versus buy decisions. It provides input and output areas for three problems, with the first problem calculating the depreciation tax shield and after-tax cost of debt for a lease. The third problem calculates the breakeven lease payment and notes that pretax cost savings are irrelevant to the decision.

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    Problems 1,3,7: Input Boxes in Tan

    Uploaded by

    Talha Bin Asim
    14 views3 pages
    The document contains instructions and templates for solving finance problems related to lease versus buy decisions. It provides input and output areas for three problems, with the first problem calculating the depreciation tax shield and after-tax cost of debt for a lease. The third problem calculates the breakeven lease payment and notes that pretax cost savings are irrelevant to the decision.

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    Original Title

    FCF 7thE Chapter26 Stu

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    The document contains instructions and templates for solving finance problems related to lease versus buy decisions. It provides input and output areas for three problems, with the first problem calculating the depreciation tax shield and after-tax cost of debt for a lease. The third problem calculates the breakeven lease payment and notes that pretax cost savings are irrelevant to the decision.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    14 views3 pages

    Problems 1,3,7: Input Boxes in Tan

    Uploaded by

    Talha Bin Asim
    The document contains instructions and templates for solving finance problems related to lease versus buy decisions. It provides input and output areas for three problems, with the first problem calculating the depreciation tax shield and after-tax cost of debt for a lease. The third problem calculates the breakeven lease payment and notes that pretax cost savings are irrelevant to the decision.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    of 3

    Chapter 26

    Problems 1,3,7
    Input boxes in tan
    Output boxes in yellow
    Given data in blue
    Calculations in red
    Answers in green
    Chapter 26
    Questions 1,3
    Input Area:
    Cost
    Life of machine
    Lease price
    Borrowing rate
    Tax rate
    Output Area:
    1) Depreciation tax shield #DIV/0!
    Aftertax cost of debt 0.00%
    Aftertax lease payment - $
    Total #DIV/0!
    NAL #DIV/0!
    #DIV/0!
    3) Breakeven lease payment #DIV/0!
    Chapter 26
    Question 7
    Input Area:
    Pretax cost savings
    System cost
    Useful life
    Tax rate
    Borrowing rate
    Lease payments
    Output Area:
    The pretax cost savings are not relevant
    in the lease versus buy decision, since the firm
    will definitely use the equipment and realize
    the savings regardless of the financing
    choice made.
    Dep. tax shield lost #DIV/0!
    Aftertax cost of debt 0.00%
    Aftertax lease payment - $
    NAL #DIV/0!
    #DIV/0!
    NAL w/o lease payment #DIV/0!
    Aftertax lease payment #DIV/0!
    Pretax lease payment #DIV/0!

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