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A lease has five annual payments of $ 1 1 5 , 0 0 0 . The leased asset would cost $ 5 0 0
A lease has five annual payments of $ The leased asset would cost $ to buy, would be depreciated straightline to a zero salvage value over years, and has an actual salvage value of zero. The firm can borrow at percent on a pretax basis and has a tax rate of percent. What is the net advantage of leasing?
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