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Anti-Germ Ltd. is considering acquiring a state-of-the-art sanitizing machine and is trying to decide whether to purchase the machine or lease it from the manufacturer.

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Anti-Germ Ltd. is considering acquiring a state-of-the-art sanitizing machine and is trying to decide whether to purchase the machine or lease it from the manufacturer. Scotiabank has offered to lend the company the $80,000 required to purchase the machine over 6 years at 8% per annum. The salvage value of the equipment is estimated at $10,000. The manufacturer, on the other hand is proposing an operation lease over 6 years with annual lease payments of $16,000 payable at the beginning of each year. If the equipment is owned it is expected that annual maintenance costs for the machine would amount to $400. Anti-Germ's tax rate is 20 percent and its cost of capital is 12 percent. The sanitizing machine has a CCA rate of 20% Required: Advise Anti-Germ Ltd. which alternative they should choose giving the reason for your answer. Short Answer Toolbar navigation B I y S iii A

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