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1 2 c beams ltd a manufacuring of lighted hockey pucks is negotating with hat trick company to purchase or to lease a machine that
c beams ltd a manufacuring of lighted hockey pucks is negotating with hat trick company to purchase or to lease a machine that produces a red lighted pucks the machine would cost $ in five years the machine would have an estimated salvage value of $ itsuseful economic life is nine years. C beams can borrow funds at pecent from its playoff bank and has a tax rate of percent the capital cost rate on thismachine is percent andC beamscost of cappital is percent lease payments would beat the begining of each year and tax savings would occur at the end of each year.lease payments would be $ over five years terms we note that of all the cash flows the salvage value has the greatest uncertainely we recognize this by disounting the salvage value at a higher discount rate the cost of capital a calculatepv cost of lease alternative do not round the intermiiadte calculations round the final answer to nearest whole dollar put the answer as positive value a calculate pv cost of borrowing alternative c shouldC beams ltd lease or borrow to purchase machine
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