Question：Alplas Co is a manufacturer of plastic boxes.
It is considering whether to lease a new machine for making coloured lids.
It is *uating the merits of purchasing the machine separately from those of leasing it.
What discount rates should be used in the calculation?
A. Machine: pre-tax cost of capital. Lease: after-tax cost of capital.
B. Machine: after-tax cost of borrowing. Lease: after-tax cost of borrowing.
C. Machine: after-tax cost of capital. Lease: after-tax cost of capital.
D. Machine: after-tax cost of capital. Lease: after-tax cost of borrowing.
The correct answer is:Machine: after-tax cost of capital. Lease: after-tax cost of borrowing.
解析：The after-tax cost of capital should be used for all types of asset *uation, whether leased or purchased.
The lease itself is a financing decision and should therefore be *uated at the after-tax cost of borrowing.
Tax should be allowed for in all the cash flows.