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Question 2 (2 points) Consider a firm A that wishes to acquire an equipment. The equipment is expected to reduce costs by $2700 per year.
Question 2 (2 points) Consider a firm A that wishes to acquire an equipment. The equipment is expected to reduce costs by $2700 per year. The equipment costs $24000 and has a useful life of 7 years. If the firm buys the equipment, they will depreciate it straight-line to zero over 7 years and dispose of it for nothing. They can lease it for 7 years with an annual lease payment of $6000. If the after-tax interest rate on secured debt issued by company A is 5% and tax rate is 20%, what is the Net Advantage to Leasing (NAL)?(keep two decimal places) Question 2 (2 points) Consider a firm A that wishes to acquire an equipment. The equipment is expected to reduce costs by $2700 per year. The equipment costs $24000 and has a useful life of 7 years. If the firm buys the equipment, they will depreciate it straight-line to zero over 7 years and dispose of it for nothing. They can lease it for 7 years with an annual lease payment of $6000. If the after-tax interest rate on secured debt issued by company A is 5% and tax rate is 20%, what is the Net Advantage to Leasing (NAL)?(keep two decimal places)
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