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Corp BBB is making the decision whether to buy or lease a piece of equipment. Using the following information find the present cost of leasing
Corp BBB is making the decision whether to buy or lease a piece of equipment. Using the following information find the present cost of leasing and buying to make a recommendation. Equipment cost= $2,000,000 3 year MARCS life 3 year economic life Cost of Debt=7% Tax Rate=25% Maintenance cost per year $100,000 paid at beginning of year Salvage equipment at end of 3rd year for $150,000 or Corp BBB could lease for $700,000 per year for three years - paid at beginning of year
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