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XYZ Company can purchase an asset for $ 2 5 , 0 0 0 ; the asset will be worthless after 1 2 years. Alternatively,

XYZ Company can purchase an asset for $25,000; the asset will be worthless after 12 years. Alternatively, it could lease the asset for 12 years with an annual lease payment of $2,500 paid at the end of each year. The firms cost of debt is 10%. The IRS classifies the lease as a non-tax-oriented lease. Is leasing a better option than buying? What is the net advantage (or disadvantage) to leasing? Please help with details. thank you!

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