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A company needs an additional machine that will be used for the next 6years, at which time the machine will be obsolete and have zero
A company needs an additional machine that will be used for the next 6years, at which time the machine will be obsolete and have zero salvage value. The company has two options available: purchase the asset for the list price of $375,000 cash or lease the asset, requiring 6 annual lease payments of $72,000 with the first payment due immediately. The lease payments include 4.0% interest. Excluding depreciation considerations, the best alternative is to
Purchase/Lease
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