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    Lease Payments and Cash Flows, No Option to Purchase

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    Given the lease payments and terms shown in the following table, determine the yearly after-tax cash outflows for each firm, assuming that lease payments are made at the end of each year and that the firm is in the 40% tax bracket.

    Assume that no purchase option exists.
    Firm Annual lease payment Term of lease
    A $100,000 4 years
    B 80,000 14
    C 150,000 8
    D 60,000 25
    E 20,000 10

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    Solution Summary

    Your tutorial is attached in Excel.