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 beginning of each year and that the firm is in the 40 percent tax bracket. Assume that no purchase option exists.
| Firm |
Annual Lease Payment
|
Term of Lease
|
| A |
$ 250,000 |
5 years |
| B |
160,000 |
12
|
| C |
500,000 |
8 |
| D |
1,000,000 |
20 |
| E |
25,000 |
6 |