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The lease payments on $19,900 of equipment would be $3,800 a year. The equipment has a...

The lease payments on $19,900 of equipment would be $3,800 a year. The equipment has a life of six years after which it is expected to have a resale value of $2,100. Assume a lessee uses straight-line depreciation, borrows at 11.5 percent, and has a tax rate of 23 percent. What amount should be included in the Year 6 cash flows when that firm computes the NAL?

Multiple Choice

  • −$5,306

  • −$6,234

  • −$4,471

  • −$4,407

  • −$5,512

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