Debt Capacity Monster Magnet Manufacturing is considering leasing some equipment. The annual lease payment would be $375,000

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Debt Capacity Monster Magnet Manufacturing is considering leasing some equipment. The annual lease payment would be $375,000 per year for six years.

The appropriate interest rate is 8 percent and the company is in the 38 percent tax bracket. How would signing the lease affect the debt capacity for the company?

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