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A company is deciding whether to lease or buy new equipment that can be purchased for $30,000. If purchased, the equipment will need to be
A company is deciding whether to lease or buy new equipment that can be purchased for $30,000. If purchased, the equipment will need to be services at the end of each year. Consider the following information:
-PVCCATS = $9000
-PV of lease payments tax shield = $39000
-PV of salvage value = $3000
-PV of lease payments before-tax = $18000
-PV of annual service costs after-tax = $5000
Based on the information, what is the present value of buying? (Do not round intermediate calculations)
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