Question
HCA Mission Healthcare needs a piece of diagnostic equipment that costs $1 million. Mission can either lease the equipment or borrow $1 million from a
HCA Mission Healthcare needs a piece of diagnostic equipment that costs $1 million. Mission can either lease the equipment or borrow $1 million from a local bank and buy the equipment. Mission's tax rate is 30 percent, and the equipment falls into the three year class. If Mission leases the equipment, the payment would be $260 thousand per year for four years, payable at the beginning of each year. If Mission borrows and buys, its bank would charge 6 percent interest (compounded annually) on the loan. Should Mission buy or lease the equipment?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
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