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Morton's Metal Fabricators needs to replace assets. New assets cost $930,000 and have an expected useful life of five years, with no salvage value. The
Morton's Metal Fabricators needs to replace assets. New assets cost $930,000 and have an expected useful life of five years, with no salvage value. The firm can lease for $245,000 a year (beginning of year payments), or borrow the money to purchase the assets at 9%. The firm's tax rate is 39%. The CCA rate is 20% (Class 8). What is the net advantage to leasing?
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