【正文】 00 NPV = $ McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 2114 A Detour on Discounting and Debt Capacity with Corporate Taxes ? Present Value of Riskless Cash Flows – In a world with corporate taxes, firms should discount riskless cash flows at the aftertax riskless rate of interest. ? Optimal Debt Level and Riskless Cash Flows – In a world with corporate taxes, one determines the increase in the firm’s optimal debt level by discounting a future guaranteed aftertax inflow at the aftertax riskless interest rate. McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 216 Accounting and Leasing ? In the old days, leases led to offbalancesheet financing. ? Today, leases are either classified as capital leases or operating leases. ? Operating leases do not appear on the balance sheet. ? Capital leases appear on the balance sheet—the present value of the lease payments appears on both sides. McGrawHill/Irwin Copyright 169。McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 217 Accounting and Leasing Balance Sheet Truck is purchased with debt Truck $100,000 Debt $100,000 Land $100,000 Equity $100,000 Total Assets $200,000 Total Debt Equity $200,000 Operating Lease Truck Debt Land $100,000 Equity $100,000 Total Assets $100,000 Total Debt Equity $100,000 Capital Lease Assets leased $100,000 Obligations under capital lease $100,000 Land $100,000 Equity $100,000 Total Assets $200,000 Total Debt Equity $200,000 McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 2115 NPV Analysis of the Decision ? A lease payment is like the debt service on a secured bond issued by the lessee. ? In the real world, many panies discount both the depreciation tax shields and the lease payments at the aftertax interest rate on secured debt issued by the lessee. McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 2123 Reservations and Negotiations ? What is the smallest lease payment that Tiger Leasing will accept? Set their NPV to zero and solve for $Lmin: ? Cash Flows: Tiger Leasing Year 0 Years 15 Cost of truck $25,000 Depreciation Tax Shield 5,000 (.34) = $1,700 Lease Payments $Lmin (1 –.34) = $Lmin .66 $25,000 $1,700 + $Lmin .66 ?? ?????? 5 1 m in )( 700,1$,25$0 t tLNPV ??????? 5151m in )(700,1$)(1$,25$t tt tL??????? 5151m in)(1$66.)(700,1$000,25$ttttL,6$m in ?LMcGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 2131 Debt Displacement and Lease Valuation 5432 )066 ($)066 ($)066 ($)066 ($)066 ($,1$ ??????$,1$$ ????AP VThe lost interest tax shield associated with this additional debt capacity of $25, has a present value of $ 0 1 2 3 4 5O u ts ta n d i n g B a l a n c e o f th e L o a n $ 2 5 , 2 1 9 . 2 0 $ 2 0 , 6 5 5 . 1 6 $ 1 5 , 8 6 2 . 9 2 $ 1 0 , 8 3 1 . 0 7 $ 5 , 5 4 7 . 6 2 $ 0 . 0 0I n t e re s t $ 1 , 9 1 0 . 5 5 $ 1 , 5 6 4 . 7 8 $ 1 , 2 0 1 . 7 4 $ 8 2 0 . 5 4 $ 4 2 0 . 2 7T a x D e d u c t i o n o n i n t e re s t $ 6 4 9 . 5 9 $ 5 3 2 . 0 3 $ 4 0 8 . 5 9 $ 2 7 8 . 9 8 $ 1 4 2 . 8 9A ft e rt a x I n t e re s t E x p e n s e $ 1 , 2 6 0 . 9 6 $ 1 , 0 3 2 . 7 6 $ 7 9 3 . 1 5 $ 5 4 1 . 5 5 $ 2 7 7 . 3 8E x t ra C a s h t h a t p u rc h a s i n g fi rm g e n e re a t e s o v e r l e a s i n g fi rm 5 , 8 2 5 . 0 0$ 5 , 8 2 5 . 0 0$ 5 , 8 2 5 . 0 0$ 5 , 8 2 5 . 0 0$ 5 , 8 2 5 . 0 0$ McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved. 2133 Appendix 21A: APV Approach to Leasing APV = AllEquity Value + Financing NPV ? To find the allequity value, discount the cash flows at the pretax interest rate. The after tax rate was 5% which implies a pretax rate of % = 5%/(). $)066 ( 900,5$000,25$ueequ ity valAll