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Example: Lease Cash Flows ABC, Inc. needs new cars. The cars would cost $10,000 each if purchased and would be depreciated at a CCA rate

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Example: Lease Cash Flows ABC, Inc. needs new cars. The cars would cost $10,000 each if purchased and would be depreciated at a CCA rate of 40%. They would help the sales force generate $6,000 in additional sales per year for 5 years. No salvage is expected after the 5 years. Alternatively, the company can lease the cars for $2,500 per year and payments are due at the beginning of the year. The marginal tax rate is 40%. What are the incremental cash flows

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