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    Lease Vs Rent

    Uploaded by

    Zain Naqvi
    This document summarizes the cash flows from a 10-year lease with annual rent increases of 10%. It shows the annual rent received, tax payments, depreciation tax savings, net cash flow, and present value of the cash flows discounted at 8.1% per year. The net present value of the total cash flows is approximately $700 million.

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    Lease Vs Rent

    Uploaded by

    Zain Naqvi
    5 views6 pages
    This document summarizes the cash flows from a 10-year lease with annual rent increases of 10%. It shows the annual rent received, tax payments, depreciation tax savings, net cash flow, and present value of the cash flows discounted at 8.1% per year. The net present value of the total cash flows is approximately $700 million.

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    Lease Vs Rent HBS

    Original Title

    lease vs rent

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    This document summarizes the cash flows from a 10-year lease with annual rent increases of 10%. It shows the annual rent received, tax payments, depreciation tax savings, net cash flow, and present value of the cash flows discounted at 8.1% per year. The net present value of the total cash flows is approximately $700 million.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    5 views6 pages

    Lease Vs Rent

    Uploaded by

    Zain Naqvi
    This document summarizes the cash flows from a 10-year lease with annual rent increases of 10%. It shows the annual rent received, tax payments, depreciation tax savings, net cash flow, and present value of the cash flows discounted at 8.1% per year. The net present value of the total cash flows is approximately $700 million.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 6

    10 years Lease

    0-10 11 12 13
    Rent Received 24000000 240000000 26400000 29040000 31944000
    Tax payment -69600000 -7656000 -8421600 -9263760
    Dep. Tax saving 199821600 68904000 68904000 68904000
    Net Cash flow 370221600 87648000 89522400 91584240
    Pv of CF@8.1%
    0.0801 370221600 37552459 35511100 33634826
    NPV 539162101
    14 15
    35138400 38652240
    -10190136 -11209149.6
    68904000 68904000
    93852264 96347090.4

    31911647.679 30330468.081
    0
    -240000000
    Rent Received
    Increment @10%
    Tax on income
    Dep.taX saving
    Net Cash flow
    PV @8.01%
    NPV 700562994.8799

    0.0801

    48000000

    237600000
    83160000
    Incremental Rent
    1 2 3 4 5 6 7

    24000000 24000000 24000000 24000000 24000000 24000000 24000000


    26400000 29040000 31944000 35138400 38652240 42517464
    -7656000 -8421600 -9263760 -10190136 -11209149.6 -12330064.56
    68904000 68904000 68904000 68904000 68904000 68904000
    24000000 111648000 113522400 115584240 117852264 120347090.4 123091399.44
    22220165 95702441 90092713.13 84926408.32 80171147.46 75796961.8818 71776114.832

    237600000
    68904000
    Incremental Rent
    8 9 10 11 12 13 14

    24000000 24000000 24000000


    46769210.4 51446131.44 56590744.584 62249819 68474800.95 75322281 82854509.15
    -13563071 -14919378.1 -16411315.929 -18052448 -19857692.27 -21843461.5 -24027807.7
    68904000 68904000 68904000 68904000 68904000 68904000 68904000
    126110139.38 129430753.3 133083428.655 113101372 117521108.7 122382820 127730701
    68082936.178 64693669.3 61586329.3797 48457861.5 46617425.66 44945777.3 43430994.31
    15

    91139960.06
    -26430588.417
    68904000
    133613371.643
    42062049.6897

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