The annual depreciation tax shield is 1760 and the, Financial Management

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The annual depreciation tax shield is 1760 and the

Audi Co. is trying to decide whether to lease or buy some new equipment for polishing vehicles. The equipment costs $22,000, has a 3-year life, and will be worthless after the 3 years. The after-tax discount rate is 6.2 percent. The annual depreciation tax shield is $1,760 and the after-tax annual lease payment is $6,800. What is the value of the lease?

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Financial Management: The annual depreciation tax shield is 1760 and the

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