Leasing Bab 7 MK 2

1. LeasingBab 7 MK 2

2. Definisi • Lease: suatu persetujuan tertulis yang memberikan kesempatan penggunaan asset2 yang berupa barang modal selama periode tertentu tanpa menerima hak atas asset tsb.

3. Who are the two parties to a lease transaction? • The lessee, who uses the asset and makes the lease, or rental, payments. • The lessor, who owns the asset and receives the rental payments. • Note that the lease decision is a financing decision for the lessee and an investment decision for the lessor.

4. What are the four primary lease types? 1. Operating lease • Short-term and normally cancelable • Maintenance usually included • Not fully amortized. The rental payments are not sufficient for the lessor to recover the full cost of the asset. However, the lease contract is shorther than the expected economic life of the asset, so the lessor can sell the asset or re-lease it to other lessee • Examples: computer, copying machine, cars, trucks and aircrafts.

5. Type of Lease 2. Financial lease • Long-term and normally noncancelable • Maintenance usually not included • Fully amortized. That is, the lessor receives rental payments equal to the full price of the asset plus a return on invested capital. • The lesse pays property taxes and insurance

6. Type of Lease 3. Sale and leaseback - A firm that owns land, buildings, or equipment sells the property to another firm and simultaneously executes an agreement to lease the property back for a stated period under specific terms. - almost the same as financial leases, the difference is that the leased equipment is used, not new, and the lessor buys it from the user-lesse instead of manufacturer or a distributor

7. Type of Lease 4. Combination lease • Combination of operating of financial lease • Combine some features of each • Example: financial leases also contain cancellation clauses ( must pay penalty payments if cancelling before the end of the leasing period )

8. Example • Thompson-Grammatikos Compnay (TGC) requires the use of a two-year aset that costs $100. TGC can borrow $100 at an interest rate of 10%, with payments of $10 each year and a principle payment of $100 at Year-2. • For simplicity, assume straight-line depreciation of $50 per year. The tax rate is 40%. • If TGC leases the asset, the lease payment is $55 due at the end of each year.

9. Example Input Data (all dollar figures in thousands) • New Equipment cost $100 • New Equipment life 2 • Equip. Salvage Value $0 • Tax Rate 40% • Loan interest rate 10% • Annual rental charge $55 • Depreciation $50 • After-tax cost of debt 6%

10. Answer

11. Answer Cost Comparison PV ownership cost @ 6% ($63,33) PV of leasing @ 6% ($60,50) Net Advantage to Leasing $2,83 The company should lease this asset!

12. Assume that Lewis Securities plans to acquire some new equipment having a 4-year useful life. • If the equipment is leased: • Firm could obtain a 4-year lease which includes maintenance. • Lease meets IRS guidelines to expense lease payments. • Rental payment would be $280,000 at the beginning of each year.

13. Other information: • Equipment cost: $1,000,000. • Loan rate on equipment = 10%. • Marginal tax rate =40%. • 3-year MACRS life. • If company borrows and buys, 4 year maintenance contract costs $20,000 at beginning of each year. • Residual value at t = 4: $100,000.

14. Time Line: After-Tax Cost of Owning (In Thousands) 0 1 2 3 4 AT loan pmt -60 -60 -60 -1,060 Dep shld 132 180 60 28 Maint -20 -20 -20 -20 Tax sav 8 8 8 8 RV 100 Tax -40 NCF 60 108 -12 -984

15. Note the depreciation shield in each year equals the depreciation expense times the lessee’s tax rate. For Year 1, the depreciation shield is $330,000(0.40) = $132,000. • The present value of the cost of owning cash flows, when discounted at 6%, is -$639,267.

16. Why use 6% as the discount rate? • Leasing is similar to debt financing. • The cash flows have relatively low risk; most are fixed by contract. • Therefore, the firm’s 10% cost of debt is a good candidate. • The tax shield of interest payments must be recognized, so the discount rate is 10%(1 - T) = 10%(1 - 0.4) = 6.0%.

17. Time Line: After-Tax Cost of Leasing (In Thousands) 0 1 2 3 4 Lease pmt -280 -280 -280 -280 Tax sav 112 112 112 112 NCF -168 -168 -168 -168 PV cost of leasing @ 6% = -$617,066.

18. What is the net advantage to leasing (NAL)? • NAL = PV cost of leasing - PV cost of owning = - $617,066 - (-$639,267)= $22,201. • Should the firm lease or buy the equipment? Why? Lease the equipment. Because the advantage of leasing over owning is $22,201

19. Soal Latihan PT. Asoy dihadapkan dua pilihan, membeli komputer atau leasing. Diketahui harga komputer 200.000. Perusahaan dapat meminjam uang untuk membeli dengan bunga 10% per tahun. Masa pakai komputer adalah 4 tahun tanpa nilai sisa. Pajak sebesar 40% dan depresiasi menggunakan metode straight line: 50.000 per tahun. Apabila perusahaan leasing, dikenakan sebesar 60.000 per tahun. Biaya hutang/ discount rate sebesar 8%. Apakah PT. Asoy harus membeli atau leasing komputer tsb? Hitung NAL!

20. Example Input Data (all dollar figures in thousands) • New Equipment cost $200 • New Equipment life 4 • Equip. Salvage Value 0 • Tax Rate 40% • Loan interest rate 10% • Annual rental charge $60 • Depreciation $40 • After-tax cost of debt 8%

21. Answer

22. Answer • PT Asoy aja lebih baik leasing karena NAL nya positif sebesar $1.27