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36 Super Sonics Entertainments is considering buying a machine that costs $4.5 million. The machine will be depreciated over four year by the straight-line method
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Super Sonics Entertainments is considering buying a machine that costs $4.5 million. The machine will be depreciated over four year 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 yoar under ethvee alternative Assume Super Sonics' tax rate is 35%, and it can issue bonds at an 8% interest rate. 40 Assume that Super Sonics does not contemplate paying taxes for the next several years. What is the NAL associate with leasing the equipment versus borrowing and buying it. O a. $28,629 O b. $27,876 Oc. -$29,117 O d. -$29,498 Oe. None of the above Step by Step Solution
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