Question
A firm is considering the purchase of a new equipment costing $7,074,880 which qualifies for a 39% CCA rate. This equipment has a 4-year life
A firm is considering the purchase of a new equipment costing $7,074,880 which qualifies for a 39% CCA rate. This equipment has a 4-year life after which it can be sold for $1,435,170. The firm can lease it for $2,150,530 per year for its useful life. Assume that the firm makes payments at the end of the year, the asset pool remains open, the tax rate is 41%, and the pre-tax cost of borrowing is 10.42%. What is the break-even lease payment?
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Engineering Economy
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
15th edition
132554909, 978-0132554909
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