Super Sonics Entertainment is considering borrowing money at 11 percent and purchasing a machine that costs ($350,000.)

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Super Sonics Entertainment is considering borrowing money at 11 percent and purchasing a machine that costs \($350,000.\) The machine will be depreciated over five years by the straight-line method and will be worthless in five years. Super Sonics can lease the machine with the year-end payments of \($94,200.\) The corporate tax rate is 35 percent.

Should Super Sonics buy or lease?

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