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Do-Rite Construction is evaluating the lease versus the purchase of a machine costing $168,000 that would be depreciated using MACRS over a fouryear period, after

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Do-Rite Construction is evaluating the lease versus the purchase of a machine costing $168,000 that would be depreciated using MACRS over a fouryear period, after which the machine would be worthless. MACRS rates are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent for Years 1 to 4. respectively. The machine could be leased for $46,500 a year for four years. The firm can borrow at 8.5 percent and has a tax rate of 21 percent. However, the firm does not expect to pay any taxes for the next five years. What is the net advantage to leasing? Muluple Choice $4,502 $1651 53.217 518550 w5.5as

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