ABC company is considering the case of investing in a new mechanical equipment

which has an acquisition cost of $240,000$ euros and a useful life of $5$ years. The business is considering

two forms of financing. One concerns obtaining a bank loan with interest

$10\%$ and lasting $5$ years. You will repay the loan in equal installments.

Alternatively, the business can finance the acquisition of the equipment through

leasing. In this case, the company will pay $5$ annual

equal rents, which will be paid at the beginning of the year. For the calculation

of the leases the leasing company requires a return of $15\%.$ The company

is taxed at $22\%$ and uses the straight line depreciation method for the

calculation of depreciation.

The calculation of the net benefit of the lease is requested. What would you advise?

the ABC business based on the results of your analysis?