SA SA INTERNATIONAL HOLDING LIMITED Sa Sa International Holding Limited (the "Company"), stock code O178, is a listed com pany in the Hong Kong Stock Exchange Market. The Company is engaged in wholesale and retail of cosmetic products. Assume the directors, Dr. Simon Kwok and Dr. Eleanor Law, have decided to expand its business and have liaised with the vendor, Ray Equipment, for a quotation. Ray Equipment has agreed to sell the equipment at a price of HKS3.8 million, at three-year MACRS depreciation. At the end of year four, the market value of the equipment is expected to be HK$250,000. Alternatively, the Company can lease the equipment from Ben Equipment Leasing. The lease agreement requires the lessee (the Company) to make four annual payments of HK$990,000, due at the beginning of each year; and the deposit of HKS200,000 will only be returned to the Company at the end of the lease term. The Company may issue bonds with the 11.5 percent yield rate, and the tax rate is 17 percent