You have the option to purchase or lease a? five-axis horizontal machining center. Any revenues generated from the operation of the machine will be the same whether it is leased or purchased. Considering the information? given, should you lease or purchase the? machine? Conduct? after-tax analyses of both options. The effective income tax rate is

4343?%,

the evaluation period is five? years, and the MARR is

1111?%

per year.

PLEASE CALCULATE AW for Purchasing as well. Thanks

Problem 7-50 (algorithmic) Question Help You have the option to purchase or lease a five-axis horizontal machining center. Any revenues generated from the operation of the machine will be the same whether itls leased or purchased. Considering the information given, should you lease or purchase the machine? Conduct after-tax analyses of both options. The effective income tax rate is 43%, the evaluation period is five years, and the MARR is 11% per year. E Click the icon to view notes and information about two options. More Info Click the icon to view the GDS Recovery Rates (k) for the 3-year property class. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year E Click the icon to view the interest and annuity table for discrete compounding when the MARR is9% per year NOTES: (1) Under the Lease Option, maintenance costs are included in the annual leasing cost. (2) Leasing costs are palo at the beginning of each year and are tax deductible. (3)Depreclatlon deductions Calculate the AW value for the Leasing option. cannot be taken on leased equipment. (4) Deposits are not tax deductible, and refunds of deposits are not taxable; however, oving to the difference in timing between payment and refund, they must be considered leasing 11% Round to the nearest h AW undreds your analysis Leasing Option Annual leasing cost: $53,000 Deposit (paid at EOY zero, refunded at EOY five): $83,000 Purchasing Option Purchase price: $346,000 capital to be borrowed a l 9%, equal annual payments (Principal Interest tor three years Depreciation: three year, MACRS Annual mai tenance cost: S20,000 Resale value at EOY 11ve: $132.000 Print Done Enter your answer in the answer box and then click Check Answer. parts Clea Check Answer remaining