What is the maximum lease payment that the company should be willing to pay

You are an analyst employed to evaluate a financial lease relating to a piece of machinery. You are provided with the following information:
Purchase price of machinery $200,000 Useful life of machinery 5 years Corporate tax rate 30% Net operating cash flows (before tax) produced by the machine at the end of each year $70,000 Required rate of return from the machine itself (after tax) 17% p.a. Cost of debt capital used to purchase the machine (before tax) 9% p.a.
The company accountant tells you the asset will be fully depreciated over its useful life and will have zero residual value. You are also told that the machine is integral to a project that management has already decided the company will proceed with.

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