In early 2002, the analyst, Tom Baumann, have to offer leasing terms one of the leading factory automation systems of the company to its biggest customers. From the point of view of the landlord, the challenge is to design a simple annuity stream that makes the present value equal to or greater than the value of the assets leased. Some factors, however, serve to complicate the analysis. The impact of tax and debt rating by not sure, leaving analysts to assess the impact of alternative lease terms in various taxes and interest rates assumptions. In addition, the customer is considering leasing competing systems from companies in Germany and Japan, the competing proposals to limit the flexibility of Primus in tailoring its offer. In general, the task of the student is to develop the lease terms, which use tax tenant and interest rates impact within the limits set in the competitive environment.
This Darden study. "Hide
by Robert F. Bruner and Sean Carr, Robert Hengelbrok Source: Darden School of Business 12 pages. Publication Date: November 17, 2005. Prod. #: UV1379-PDF-ENG
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