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An investment bank has sought your advise on their plan to install Bloomberg Terminals in their new offices. They have the below three option They
An investment bank has sought your advise on their plan to install Bloomberg Terminals in their new offices. They have the below three option
They can lease the Terminals for growing at a year for years. The lease expenses would be treated as operating and therefore would be taxdeductible.
They can buy the Terminals for and depreciate it over years, which is the expected project life.
The third option is to buy the Terminals for and expense it immediately. The Terminals will still have an expected life of years.
If the main rate of corporation tax is and the cost of capital is estimate the equivalent annual cost of each option.
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