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b) You company wants to purchase a new network file server for its wide-area network. The server costs R75 000. It will be completely obsolete

b) You company wants to purchase a new network file server for its wide-area network. The server costs R75 000. It will be completely obsolete in three years. Your options are to borrow the money at 10% or to lease the machine. If you lease it, the payments will be R30 000 per year, payable at the end of each year for the next three years. If you buy the server you can depreciate it straight line to zero over three years. The tax rate is 30%. Should you lease or buy.

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