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1. NAL ASSOCIATE WITH LEASING THE EQUIPMENT VS BORROW & BUY? 2. BE LEASE RATE 3. WHAT'S THE CF FROM THE LEASE FROM LESSOR VIEWPOINT?
1. NAL ASSOCIATE WITH LEASING THE EQUIPMENT VS BORROW & BUY?
2. BE LEASE RATE
3. WHAT'S THE CF FROM THE LEASE FROM LESSOR VIEWPOINT? COST DE DEBT= 8% & T=35%
Super Sonics Entertainments is considering buying a machine that costs $4.5 million. The machine will be depreciated over four years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $1.35 million per year for four years. Super Sonics is to provide the maintenance expenses of $250,000 per year under either alternative. Assume Super Sonics' tax rate is 35%, and it can issue bonds at an 8% interest rateStep by Step Solution
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