Can anyone tell me how they got $295.5336 at time 0? I believe that it may have something to do with the lease rate (300*.985). Are they saying that it implicitly costs them less b/c they would be willing to lend it at the lease rate? Thanks for you help.
Bump I have the same question. Anyone know why?
check errata
Don’t see it on there.
I believe it’s e ^ (negative whatever) times $300k, if I remember correctly. I was confused and played with the numbers to see what they did, but I sure don’t remember what the purpose of it was right now.