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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 $; the asset will be worthless after years. Alternatively, it could lease the asset for years with an annual lease payment of $ paid at the end of each year. The firms cost of debt is The IRS classifies the lease as a nontaxoriented 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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