15-4 Lease versus Buy Misty River Minerals must install $5.6 million of new machinery in its Ontario mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply: (1) The machinery falls into asset Class 38 with a declining balance CCA rate of 30%. taxes, and maintenance. (3) The firm's tax rate is 26%. (4) The loan would have an interest rate of 10%. (5) The lease terms call for $1,425,000 payments at the beginning of each of the next 4 years. (6) Assume that Misty River Minerals has no use for the machine beyond the expiration of the lease. The machine has an estimated residual value of $1,000,000 at the end of the What is the NAL of the lease? 20-4 Branger Ltd. has the choice of issuing floating-rate debt at LIBOR + 1% or fixed-rate dept Swaps at 6%. Likewise, Creeson Plastics can issue floating-rate debt at LIBOR + 2.5% or fixed-rate debt at 7.7%. Suppose Branger issues fixed-rate debt and Creeson issues floating-rate dest. The two companies are considering a swap where Branger will make LIBOR payments to and Creeson if they engage in the swap? Is it better for Branger to issue fixed-rate debt and enter into the swap or to issue floating-rate debt? Is it better for Creeson to issue floating rate debt and to enter into the swap or issue fixed-rate debt? What decision would each company Challenging