Tutorials

Calculate the level monthly rent that provides a nominal 6.50% MISF B/T yield to a lessor with December yearend and a 21% Federal tax rate assuming the following deal parameters:

Asset: 4 Tractors | Lessor Cost: $675,000 | TRAC Amount: 30% | Funding Date: March 7, 2025 | Base Commencement Date: April 10, 2025 | Lease Term: 48 months | Rent: Payable monthly in arrears | Depreciation: 3-year MACRS with 40% First Year Bonus.

Save the above File as " My Deal1".

Open " My Deal1". Add a Fee to the parameters. Then solve for the Fee amount that results in a nominal MISF B/T yield of 5.25%. Then, using the method shown the 2nd instructional video, save the File as "My Deal1 wFee".

Open "My Deal1 wFee". Then follow the instruction for removing the Fee.  Note that the calculated MISF B/T yield is the same as the Target Yield in Tutorial #1.

Calculate the MISF A/T yield to a lessor with December yearend and a 35% Federal tax rate assuming the following deal parameters:

Asset: Dozers and Excavators | Lessor Cost: $1,000,000 | Residual Amount: 18% | Lessee Guaranty: 0% | Funding Date: January 1, 2025 | Base Commencement Date: January 1, 2025 | Lease Term: 84 months | Rent: Payable monthly in arrears  @ $11,063.74 | Depreciation: 5-year MACRS with 50% First Year Bonus.

Then save the file as My Deal2.

Open "My Deal2".  Add an Early Buyout Option at the end of the 66th month of the Base Lease Term.  Price the EBO amount at a 20 basis point premium to the full-term after-tax MISF yield.