Table 1

Selected Cash Flow Data

(In Thousands if Dollars)
MACRS Depreciation Table:
MACRS
Depreciation
Year
Rate
Basis
1
20%
$1,375.00
2
32%
$1,375.00
3
19%
$1,375.00
4
12%
$1,375.00
5
11%
$1,375.00
6
6%
$1,375.00

Annual
Depreciation
$275.00
$440.00
$261.25
$165.00
$151.25
$82.50
$1,375.00

Ending
Book Value
$1,100.00
$660.00
$398.75
$233.75
$82.50
$0.00

Part A: Lessee's Analysis:

Cost of Owning:
Equipment Cost
Maintenance
Maintenance tax savings
Depreciation shield
Residual value
RV tax
Net owning CF

Cost of Leasing:
Lease payment
Payment tax savings
Net leasing CF

Year 0
($1,375.00)
($75.00)

Year 1

Year 2

Year 3

($75.00)

($75.00)

($75.00)

$30.00

$30.00
$110.00

$30.00
$176.00

$30.00
$104.50

($1,420.00)

$65.00

($435.00)
$174.00
($261.00)

($435.00)
$174.00
($261.00)

$59.50

($435.00)
$174.00
($261.00)

($435.00)
$174.00
($261.00)

Year 4

$66.00
$233.75
$0.00
$299.75

$0.00

Part A: Lessor's Analysis:

Equipment Cost
Maintenance
Maintenance tax savings
Depreciation shield
Residual value
RV tax
Lease payment
Lease payment tax
Net CF

Year 0
($1,375.00)
($75.00)
$0.00

$435.00
$0.00
($1,015.00)

Year 1

Year 2

Year 3

($75.00)
$0.00
$0.00

($75.00)
$0.00
$0.00

($75.00)
$0.00
$0.00

$435.00
$0.00
$
360.00

$435.00
$0.00
$360.00

$435.00
$0.00
$360.00

Year 4

$0.00
$233.75
$0.00

$233.75