Question
Leasing versus borrowing Jick and Jill company (JJC) has a tax rate of 30 per cent. it is looking at obtaining a new laser scanner
Leasing versus borrowing Jick and Jill company (JJC) has a tax rate of 30 per cent. it is looking at obtaining a new laser scanner that identifies potential melanomas. the cost is $50000 bu JJC can lease it for $3251 a month, with payments made in advance for the next tax year. alternatively, it can borrow at 8.24 per cent per year with payments of $4042 a month in arrears.
The lease has a residual of $10000 when the salvage value will be $12000. Because of the special nature of the equipment the commissioner of taxation will allow monthly depreciation of $3000. should JCC lease?
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
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