Transcript Kuliah 11 Leasing.

Leasing
Bab 7 MK 2
May 2007
Definisi

Lease: suatu persetujuan tertulis yang
memberikan kesempatan penggunaan
asset2 yang berupa barang modal selama
periode tertentu tanpa menerima hak atas
asset tsb.
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.
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.
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
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
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 )
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.
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%
Answer
A
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
B
Year =
Cost of Owning
Equipment cost
Loan amount
Interest expense
Tax savings from interest
Principal repayment
Tax savings from depr.
Net cash flow
PV ownership cost @ 6%
Cost of Leasing
Lease payment
Tax savings from lease
Net cash flow
PV of leasing @ 6%
C
0
D
1
E
2
F
($100)
$100
($10)
4
$0
($63,33)
$0
($60,50)
$20
$14
($10)
4
($100)
$20
($86)
($55)
$22
($33)
($55)
$22
($33)
Answer
Cost Comparison
PV ownership cost @ 6%
PV of leasing @ 6%
Net Advantage to Leasing
($63,33)
($60,50)
$2,83
The company should lease this asset!
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.

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.
Time Line: After-Tax Cost of Owning
(In Thousands)
0
AT loan pmt
Dep shld
Maint
Tax sav
RV
Tax
NCF
1
2
3
4
-60
132
-20
8
-60
180
-20
8
-60
60
-20
8
-1,060
28
-20
8
100
-40
60
108
-12
-984

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.
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%.
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
-168
-168
-168
-168
NCF
PV cost of leasing @ 6% = -$617,066.
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
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!
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%
Answer
Year =
Cost of Owning
Equipment cost
Loan amount
Interest expense
Tax savings from interest
Principal repayment
Tax savings from depr.
Net cash flow
PV ownership cost @ 8%
0
1
2
3
4
($200)
$200
$0
($120,51)
Cost of Leasing
Lease payment
Tax savings from lease
Net cash flow
PV of leasing @ 8%
$0
($119,24)
Cost Comparison
PV ownership cost @ 8%
PV of leasing @ 8%
Net Advantage to Leasing
($120,51)
($119,24)
$1,27
($20)
8
($20)
8
($20)
8
$20
$8
$20
$8
$20
$8
($60)
$24
($36)
($60)
$24
($36)
($60)
$24
($36)
($20)
8
($200)
$20
($192)
($60)
$24
($36)
Answer

PT Asoy aja lebih baik leasing karena NAL
nya positif sebesar $1.27