Purchase, Lease, and Rental.

Items to be entered are outlined with a double

General Information Used for Lease and Purchase as necessary

Item to Purchase Crane
Marginal Tax Rate 33.00%
Discount Rate 12.00%
Current market Value of Trade-in RS 26,500,000.00
Undepreciatied Value of Trade-in RS 26,500,000.00
Cost of Machine Sold or Traded Rs 0.00
Sell or Trade (1 or 2) 1.00
Machinery Group Number (1-4) 1.00
Depreciation Class, 3, 5, or 7yr (3 , 5 or 7) 7.00
Capital Gains Tax Rate (% Gain Taxed) 33.00%
Annual Cash Operating Expenses 390,000.00
Expected Annual Inflation Rate 8.00%
PURCHASE INFORMATION
Purchase Price 26,500,000.00
Amount to Finance 26,500,000.00
Downpayment 0.00
Interest rate 6.00%
Years to Finance Yrs 3.00
Number of Years for Analysis Yrs 10.00
Calculated Payment (Annual Payments Assumed) 9,913,910.04

Amount Expensed ($) 390,000.00

Investment Credit Taken 4.50%
Investment Credit Applicable 1,174,950.00
Depreciable Basis 25,522,525.00
Estimated salvage Value 50,215,305.31

Tax Adjusted Discount Rate 8.04%

PURCHASE
Depreciation
Downpayment and Annual
Year and Interest First Year Cash Operating
Principal Payment Expensing Expense
0.00 0.00 3,123,462.43 390,000.00
1.00 8,323,910.04 ### 4,882,459.08 421,200.00
2.00 8,823,344.64 ### 5,010,985.51 454,896.00
3.00 9,352,745.32 561,164.72 ### 491,287.68
 4.00 0.00 0.00 ### 530,590.69
5.00 0.00 0.00 3,126,509.31 573,037.95
6.00 0.00 0.00 3,126,509.39 618,880.99
7.00 0.00 0.00 1,564,530.78 668,391.46
8.00 0.00 0.00 721,862.78
9.00 0.00 0.00 779,611.80
10.00 0.00 0.00 0.00
11.00 0.00 0.00 0.00
12.00 0.00 0.00 0.00
13.00 0.00 0.00 0.00
14.00 0.00 0.00 0.00
15.00 0.00 0.00 0.00
Total Depreciation Taken ###

Lease:
Item for Lease Crane
Purchase or List Price of Lease Item 2,735,000.00
Lease Terms: Residual Value 0.15
Interest Rate 0.50
Term in Years 5.00
No Buyout = 1 Buyout = 2 2.00
Marginal Tax Rate 0.33
Discount Factor to be Used 0.10
Annual Cash Expense Befor Buyout 333,240.00
Annual Cash Expense After Buyout 1,921,840.00
Salvage as a % of Buyout 0.00
Expected Annual Inflation Rate 0.08

Calculated Annual Lease Payment $ 1,338,659.36

Calculated Buyout Amount 410,250.00
Percent of Buyout Amount Financed 0.00
Term of Loan in Years After Buyout 5.00
Calculated Depreciable Basis After Buyout 410,250.00
Net Present Value of the Lease -12,344,791.49

Annual Annual
Loan Cash Lease Tax Savings After Tax
Analysis Repayment Outflows From Lease Lease
Year Year and Buyout Payment Payment
 0.00 0.00 ### 441,757.59 896,901.77
1.00 0.00 ### 441,757.59 896,901.77
2.00 0.00 ### 441,757.59 896,901.77
3.00 0.00 ### 441,757.59 896,901.77
4.00 0.00 ### 441,757.59 896,901.77
5.00 1.00 410,250.00 0.00 0.00
6.00 2.00 0.00 0.00 0.00
7.00 3.00 0.00 0.00 0.00
8.00 4.00 0.00 0.00 0.00
9.00 5.00 0.00 0.00 0.00
10.00 6.00 0.00 0.00 0.00
11.00 7.00 0.00 0.00 0.00
12.00 8.00 0.00 0.00 0.00
13.00 9.00 0.00 0.00 0.00
14.00 10.00 0.00 0.00 0.00
15.00 11.00 0.00 0.00 0.00

Net Present Value Equals: PV of After Tax Lease Payments

Plus PV of Cash Buyout Amount
Plus PV of Annual Cash Operating Outflows
Plus PV of Principle and Interest Payments
Minus PV of Tax Savings From Dep. & Cash Operating
Minus PV of Income From Salvage Value
Net Present Value of Lease

Rental/Custom ANALYSIS:
Include annual rental fee and
Operating costs incurred by renter
in Current Dollars. Annual Annual
Rental Cash
Analysis Year Payment Operating Exp.
0.00 0.00 0.00
1.00 0.00 0.00
2.00 0.00 0.00
3.00 0.00 0.00
4.00 0.00 0.00
5.00 0.00 0.00
6.00 0.00 0.00
7.00 0.00 0.00
8.00 0.00 0.00
9.00 0.00 0.00
10.00 0.00 0.00
11.00 0.00 0.00
12.00 0.00 0.00
13.00 0.00 0.00
14.00 0.00 0.00
15.00 0.00 0.00
And text is in Blue

This worksheet should only be used to calculate

Net Present Values for capital items which Do Not
generate a stream of income. The best alternative is
the one that has the smallest negative net present value.
41,222.60

(lease, purchase and rental/custom)

Tax Adjusted
ITC Net Discount Cummulative
& Tax After Tax Factor Present Net Present
Residual Credit Cash Outflow 8.04% Value Value
56,557,557.40 56,947,557.40 1.00 56,947,557.40 ###
### -1,887,174.00 7,272,986.04 0.93 6,731,753.09 ###
0.00 -2,163,627.48 8,205,178.56 0.86 7,029,410.17 ###
0.00 -9,801,490.61 603,707.10 0.79 478,710.07 ###
 0.00 -17,777,893.75 -17,247,303.06 0.73 -12,658,518.85 ###
0.00 -1,220,850.60 -647,812.65 0.68 -440,074.84 ###
0.00 -1,235,978.83 -617,097.84 0.63 -388,013.26 ###
0.00 -736,864.34 -68,472.88 0.58 -39,849.84 ###
0.00 -238,214.72 483,648.06 0.54 260,527.07 ###
### 16,313,778.86 -33,121,914.65 0.50 -16,514,075.05 ###
0.00 0.00 0.00 0.46 0.00 0.00
0.00 0.00 0.00 0.43 0.00 0.00
0.00 0.00 0.00 0.40 0.00 0.00
0.00 0.00 0.00 0.37 0.00 0.00
0.00 0.00 0.00 0.34 0.00 0.00
0.00 0.00 0.00 0.31 0.00 0.00
Net Present Value (After 41,407,425.95

Enter as a Decimal
Enter as a Decimal
Whole Years Only

Enter as a Decimal

Enter in Current Dollars

Enter in Current Dollars

Tax Adjusted Present Annual

Discount Value of Cash Annual Annual Annual
Factor After Tax Operating Depreciation Principle Interest
0.07 Lease Payment Outflows Expense Payments Payment
 1.00 896,901.77 333,240.00 0.00 0.00 0.00
0.94 840,582.73 359,899.20 0.00 0.00 0.00
0.88 787,800.12 388,691.14 0.00 0.00 0.00
0.82 738,331.88 419,786.43 0.00 0.00 0.00
0.77 691,969.90 453,369.34 0.00 0.00 0.00
0.72 0.00 2,823,813.47 ### 0.00 0.00
0.68 0.00 3,049,718.55 ### 0.00 0.00
0.64 0.00 3,293,696.03 ### 0.00 0.00
0.60 0.00 3,557,191.72 ### 0.00 0.00
0.56 0.00 3,841,767.05 ### 0.00 0.00
0.52 0.00 0.00 0.00 0.00 0.00
0.49 0.00 0.00 0.00 0.00 0.00
0.46 0.00 0.00 0.00 0.00 0.00
0.43 0.00 0.00 0.00 0.00 0.00
0.40 0.00 0.00 0.00 0.00 0.00
0.38 0.00 0.00 0.00 0.00 0.00
3,955,586.41 18,521,172.92 ### 0.00 0.00

3,955,586.41
296,637.80
perating Outflows 12,168,131.75
nterest Payments 0.00
From Dep. & Cash Operating -4,075,564.47
Salvage Value 0.00
sent Value of Lease ###

Tax Adjusted
Tax Savings After Tax Discount Cummulative
From Rents Cash Factor Net Present Annual
Paid Outflows 0.07 Value Equivalent
0.00 0.00 1.00 0.00
0.00 0.00 0.94 0.00
0.00 0.00 0.88 0.00 0.00
0.00 0.00 0.82 0.00 0.00
0.00 0.00 0.77 0.00 0.00
0.00 0.00 0.72 0.00 0.00
0.00 0.00 0.68 0.00 0.00
0.00 0.00 0.64 0.00 0.00
0.00 0.00 0.60 0.00 0.00
0.00 0.00 0.56 0.00 0.00
0.00 0.00 0.52 0.00 0.00
0.00 0.00 0.49 0.00 0.00
0.00 0.00 0.46 0.00 0.00
0.00 0.00 0.43 0.00 0.00
0.00 0.00 0.40 0.00 0.00
0.00 0.00 0.38 0.00 0.00
 REMAINING VALUE OF INVESTMENT

Beginning Tractor Impl't Impl't Impl't

Year Group Group Group Group
1.00 2.00 3.00 4.00
1.00 1.00 1.00 1.00 1.00
2.00 0.63 0.57 0.53 0.50
3.00 0.58 0.50 0.47 0.44
4.00 0.53 0.44 0.42 0.39
5.00 0.49 0.39 0.37 0.34
6.00 0.45 0.35 0.33 0.30
7.00 0.41 0.31 0.29 0.27
8.00 0.38 0.27 0.26 0.24
9.00 0.35 0.24 0.23 0.21
10.00 0.32 0.21 0.20 0.19
11.00 0.29 0.19 0.18 0.17
12.00 0.27 0.17 0.16 0.15

1994 Depreciation for Machinery and Equipment

Declining Balance Method
Year 3-Year 5-Year 7-year
0.00 3.00 5.00 7.00
1.00 30.00% 15.00% 10.71%
2.00 37.50% 25.50% 19.13%
3.00 25.00% 17.85% 15.03%
4.00 12.50% 16.66% 12.25%
5.00 16.66% 12.25%
6.00 8.33% 12.25%
7.00 12.25%
8.00 6.13%

The depreciation schedules shown above can be

Annual changed at any time to update this program to reflect
Equivalent changes in tax laws or depreciation methods.
If you change the table, you MUST leave the shaded
line with 0, 3, 5, and 7 indicating the class
### life of depreciation or replace it with something similar.
### If the years (class life) do not change, simply
 ### enter the new depreciation rates under the
### appropriate class life.
###
###
###
###
0.00
0.00
0.00
0.00
0.00
0.00

Tax Savings Present Present Present

From Depr. Value of Present Value of Value of
Annual Cash Tax Savings Value of Annual Principle Cumulative
Operating & From Depr. Buyout Cash & Interest Net Present Annual
Interest Oper. & Int. Amount Operating Payments Value Equivalent
109,969.20 109,969.20 0.00 333,240.00 0.00 ###
118,766.74 111,309.03 0.00 337,300.09 0.00 ###
128,268.07 112,665.19 0.00 341,409.65 0.00 ### ###
138,529.52 114,037.86 0.00 345,569.28 0.00 ### ###
149,611.88 115,427.27 0.00 349,779.59 0.00 ### ###
946,357.91 684,279.17 ### ### 0.00 ### ###
### 699,554.97 0.00 ### 0.00 ### ###
### 703,236.96 0.00 ### 0.00 ### ###
### 708,595.82 0.00 ### 0.00 ### ###
### 716,489.00 0.00 ### 0.00 ### ###
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
### ### ### ### 0.00
###

###

###

###
###
0
 ###
###
###
###
###

$0

Analysis
Year
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15