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A firm plans to either purchase or lease a machine that costs $ 3 0 0 , 0 0 0 and is subject to a
A firm plans to either purchase or lease a machine that costs $ and is subject to a percent CCA rate, using the declining balance method. The required lease payments are $ at the beginning of each of four years. The lessor has agreed to provide maintenance as part of the lease contract, and the firm has estimated it would incur $ per year in maintenance expense if it decided to purchase the machine. It estimates the asset could be sold for $ after four years the ending UCC at the end of year The firms beforetax borrowing rate is percent, and its effective tax rate is percent. Should it purchase or lease the machine, assuming the acquisition of the machine has a positive NPVInclude the halfyear rule.
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