Leasecalculator: Keyed to "Valuation of financial lease contracts," Myers SC, Dill DA, Bautista, AJ

Input
Enter trial value of P in Cell C3: use Solver
P
Lease payment per rupee of asset leased
0.12883
DEP
Depreciation rate
1/15
r
Firm's borrowing rate
10.00%
T_Lr
Marginal corporate tax rate: Lessor
50%
T_Le
Marginal corporate tax rate: Lessee
25%
H
Lease period [MAX 20 years]
15 OK
LambdaLr Debt per rupee of assets leased <=1.00
1.00 OK
LambdaLe Debt per rupee of assets leased <=1.00
1.00 OK
Output
V0 Lessor Value of lease contract per rupee of asset leased: Lessor
0.0146
V0 Lessee Value of lease contract per rupee of asset leased: Lessee
0.0000
CALCULATION
1
2
3
SLM Deprecation calculation [ignores H]
b
0.0667
0.0667
0.0667
Asset value
0.9333
0.8667
0.8000
Lessor
P*(1-T)
0.0644
0.0644
0.0644
b*T
0.0333
0.0333
0.0333
(P*(1-T)+bT)/(1+r(1-Lambda*T)^t
0.0931
0.0887
0.0844
V0
0.0146
Lessee
P*(1-T)
0.0966
0.0966
0.0966
b*T
0.0167
0.0167
0.0167
(P*(1-T)+bT)/(1+r(1-Lambda*T)^t
0.1054
0.0980
0.0912
V0
0.0000

10

11

12

0.0667
0.7333

0.0667
0.6667

0.0667
0.6000

0.0667
0.5333

0.0667
0.4667

0.0667
0.4000

0.0667
0.3333

0.0667
0.2667

0.0667
0.2000

0.0644
0.0333
0.0804

0.0644
0.0333
0.0766

0.0644
0.0333
0.0729

0.0644
0.0333
0.0695

0.0644
0.0333
0.0662

0.0644
0.0333
0.0630

0.0644
0.0333
0.0600

0.0644
0.0333
0.0572

0.0644
0.0333
0.0544

0.0966
0.0167
0.0848

0.0966
0.0167
0.0789

0.0966
0.0167
0.0734

0.0966
0.0167
0.0683

0.0966
0.0167
0.0635

0.0966
0.0167
0.0591

0.0966
0.0167
0.0550

0.0966
0.0167
0.0511

0.0966
0.0167
0.0476

13

14

15

16

17

18

19

20

0.0667
0.1333

0.0667
0.0667

0.0667
0.0000

0.0000
0.0000

0.0000
0.0000

0.0000
0.0000

0.0000
0.0000

0.0000
0.0000

0.0644
0.0333
0.0518

0.0644
0.0333
0.0494

0.0644
0.0333
0.0470

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0966
0.0167
0.0442

0.0966
0.0167
0.0412

0.0966
0.0167
0.0383

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000

0.0000
0.0000
0.0000