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PART EIGHT Topics in Corporate Finance

Incremental Cash Flows

Lease versus Buy

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

for Tasha Corp. from Leasing Instead of Buying

Aftertax lease payment Lost depreciation tax shield Cost of machine

+$10,000

-$1,650 - 680

-$1,650 - 680

-$1,650 - 680

-$1,650 - 680

-$1,650 - 680

0 0

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