PRESENT VALUE OF AFTER-TAX CASH OUTFLOWS ASSOCIATED WITH LEASING
[(1-TR)] [(1)x(2)] (Use Disc. Rate) [(3)x(4)]
(1) (2) (3) (4) (5) FIRM DETAILS:
End of Lease Tax After-Tax Present Value Present Value
Year Payments Adjustment Cash Outflows Factors of Outflows Tax Rate = 40.00%
1 $ 5,000.00 60.00% $ 3,000.00 0.917431 $ 2,752.29
2 $ 5,000.00 60.00% $ 3,000.00 0.841680 $ 2,525.04 Discount Rate = 9.00%
3 $ 5,000.00 60.00% $ 3,000.00 0.772183 $ 2,316.55
4 $ 5,000.00 60.00% $ 3,000.00 0.708425 $ 2,125.28
5 $ 5,000.00 60.00% $ 3,000.00 0.649931 $ 1,949.79
Purchase Option: $ 4,000.00 0.649931 $ 2,599.73
Present Value of After-Tax Cash Outflows Associated with Leasing = $ 14,268.68
LOAN PAYMENTS TOWARD PURCHASE
[IR x (1)] [(2)-(3)] [(1)-(4)]
(1) (2) (3) (4) (5)
End of Beginning of Loan Interest Principal End of Year LOAN DETAILS:
Year Year Balance Payments Paid Repaid Balance
1 $ 20,000.00 $ 5,966.31 $ 3,000.00 $ 2,966.31 $ 17,033.69 Interest Rate = 15%
2 $ 17,033.69 $ 5,966.31 $ 2,555.05 $ 3,411.26 $ 13,622.43
3 $ 13,622.43 $ 5,966.31 $ 2,043.36 $ 3,922.95 $ 9,699.48 Loan Term = 5
4 $ 9,699.48 $ 5,966.31 $ 1,454.92 $ 4,511.39 $ 5,188.10
5 $ 5,188.10 $ 5,966.31 $ 778.21 $ 5,188.10 $ (0.00)
PRESENT VALUE OF AFTER-TAX CASH OUTFLOWS ASSOCIATED WITH PURCHASE
[(3)x(4)] [(2)+(5)+(6)] [TR x (7)] [(1)+(2)-(8)] (Use Disc. Rate) [(9)x(10)]
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
End of Loan Maintenance Cost of Depreciation Depreciation Interest Total Tax After-Tax Present Value Present Value
Year Payments Costs Asset Percentages Amount Paid Deductions Shields Cash Outflows Factors of Outflows
1 $ 5,966.31 $ 1,000.00 $ 20,000.00 20% $ 4,000.00 $ 3,000.00 $ 8,000.00 $ 3,200.00 $ 3,766.31 0.9174312 $ 3,455.33
2 $ 5,966.31 $ 1,000.00 $ 20,000.00 32% $ 6,400.00 $ 2,555.05 $ 9,955.05 $ 3,982.02 $ 2,984.29 0.8416800 $ 2,511.82
3 $ 5,966.31 $ 1,000.00 $ 20,000.00 19% $ 3,800.00 $ 2,043.36 $ 6,843.36 $ 2,737.35 $ 4,228.97 0.7721835 $ 3,265.54
4 $ 5,966.31 $ 1,000.00 $ 20,000.00 12% $ 2,400.00 $ 1,454.92 $ 4,854.92 $ 1,941.97 $ 5,024.34 0.7084252 $ 3,559.37
5 $ 5,966.31 $ 1,000.00 $ 20,000.00 12% $ 2,400.00 $ 778.21 $ 4,178.21 $ 1,671.29 $ 5,295.03 0.6499314 $ 3,441.40
Present Value of After-Tax Cash Outflows Associated with Purchase = $ 16,233.46