SFM - lease financing plz help

STUDENT (student) (267 Points)

29 June 2011  

if in lease financing problem, two rate are given

1. borrowing rate before tax

2.cost of capital ( before tax or after tax is not specified in problem)

which rate will be use for discounting cash flow & for calculating equal annualized lease rent from the lessee point of view :-

1.borrowing rate after tax


2.cost of capital.


plz help