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You are CFO of a company that has decided to acquire an expensive piece of equipment. The main point of this capital asset acquisition is
You are CFO of a company that has decided to acquire an expensive piece of equipment. The main point of this capital asset acquisition is buy or lease decision.
If you are convinced that the government is going to both raise the tax rate for corporations and eliminate some statutory deductions now used as incentives to corporations for acquiring capital assets, but you are also convinced that your company's WACC (weighted average cost of capital) is going to rise from 10% to 40%, which one of these two purchase methods (lease or cash purchase) do you suggest ?
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