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The choices for two fill in the blank is moreless Allied Logistics Ltd. is considering leasing new machinery that will cost exist100,000 (including shipping and
The choices for two fill in the blank is moreless
Allied Logistics Ltd. is considering leasing new machinery that will cost exist100,000 (including shipping and installation). The lease payment is exist14,000 per year for eight years, paid at the beginning of each year. Other information pertaining to the equipment and lease is as follows: Maintenance of exist850 per year will be paid by the lessor. Allied's tax rate is 26%. CCA rate on the machinery is 20%. Allied's cost of borrowing is 6.5%. Estimated residual value of the equipment at the end of 8 years is expected to be exist15,000. Based on the preceding information, complete the following table: The present value of the CCA tax shield makes leasing the equipment ____ valuable to Allied Logistics. The present value of the after-tax maintenance costs makes leasing the equipment ______ valuable to Allied. What is the Net Advantage to Leasing (NAL) for Allied Logistics Ltd.? exist6, 871.69 exist4, 754.81 exist10, 341.39Step by Step Solution
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