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A. The GoRide Company has decided to acquire a new car. The company can purchase the car for Rp200 million which has an expected life
A. The GoRide Company has decided to acquire a new car. The company can purchase the car for Rp200 million which has an expected life of 5 years and will be depreciated using a straight-line method. A multi-finance company has offered to lease the car to GoRide for Rp45 million a year for 5 years. GoRide has an 15% cost of equity, 8% cost of debt, a 1:1.5 D/E ratio and faces a 34% marginal tax rate. Should they lease or buy? Show all work
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