Lease

Structured Finance Leveraged leasing Hardware Leasing Company Data: Value of equipment Asset life Residual value Tax life Leasing company's tax rate Leasing company's required IRR $ $ 1,000,000 15 years 200,000 7 years 30% 15% Lease Tenor of lease Frequency Rate on lease Monthly lease payments Leveraged financing Amount of debt Tenor of debt Rate on debt Terminal payment Frequency Monthly loan payments 15 years 12 6.5% $8,052 $ $ 800,000 15 7.50% 200,000 12 $6,812 Total PV to Hardware Leasing Initial equity investment Required return Monthly net lease receipts Period of net lease receipts PV of net lease receipts Residual or EBO value Date of residual value PV of residual value Final or EBO payment to bank Date of final payment PV of final payment to bank Monthly tax shield (using DDB) Period of tax savings PV of tax savings Total Net Present Value $ $ $ $ $ $ 200,000 15% $1,240 15 $88,606 200,000 15 21,376 200,000 15 (21,376) 7,143 3.5 $232,295 $120,901 years years years years Structured Finance Leveraged leasing Hardware Leasing Company Data: Value of equipment Asset life Residual value Tax life Leasing company's tax rate Leasing company's required IRR $ $ 1,000,000 15 years 200,000 7 years 30% 15% Lease Tenor of lease Frequency Rate on lease Monthly lease payments Leveraged financing Amount of debt Tenor of debt Rate on debt Terminal payment Frequency Monthly loan payments 15 years 12 6.5% $8,052 After 10 years 5 12 6.5% $8,052 $556,169 PV $ $ 800,000 15 7.50% 200,000 12 $6,812 5 7.50% $ 200,000 12 $6,812 $477,577.03 PV Total PV to Hardware Leasing Initial equity investment Required return Monthly net lease receipts Period of net lease receipts PV of net lease receipts Residual or EBO value Date of residual value PV of residual value Final or EBO payment to bank Date of final payment PV of final payment to bank Monthly tax shield (using DDB) Period of tax savings PV of tax savings Total Net Present Value $ $ $ $ $ $ 200,000 15% $1,240 15 $88,606 200,000 15 21,376 200,000 15 (21,376) 7,143 3.5 $232,295 $120,901 $ years years years years 200,000 15% $1,240 10 $76,866 $556,169 10 $ 125,257 $477,577.03 10 $ (107,557) $ 7,143 3.5 $232,295 $126,861 years years years years