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Burlington Northern Railroad Company: Eq...

Eades, Kenneth M.

Case

Burlington Northern Railroad Company: Equipment Leasing

Eades, Kenneth M.

F-0969 | Published September 16, 1991 Case

Collection: Darden School of Business

Product Details

The director of equipment finance at Burlington Northern Railroad Company must decide if a leveraged-lease proposal is acceptable. The case emphasizes the importance of the lessee's tax status to the value of the lease and how the perception of residual value affects the valuation for both the lessee and lessor. To value the lease properly, the student must identify the relevant cash flows and the appropriate discount rates for those flows.

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