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Your company needs to acquire a new machine. You have gathered the following information: Cost of the machine $66,000 Useful life 11 years Salvage value
Your company needs to acquire a new machine. You have gathered the following information: Cost of the machine $66,000 Useful life 11 years Salvage value $5,500 Borrowing rate 9% Lease payment, beginning of each year $9,350 CCA rate 22% Tax rate 28% Salvage value discount rate 17% Required: Use NPV analysis to determine whether the company should buy or lease the machine. (round to the nearest dollar) Please fill in ALL blanks. LEASE:
Your company needs to acquire a new machine. You have gathered the following information:
Cost of the machine $66,000
Useful life 11 years
Salvage value $5,500
Borrowing rate 9%
Lease payment, beginning of each year $9,350
CCA rate 22%
Tax rate 28%
Salvage value discount rate 17%
Required: Use NPV analysis to determine whether the company should buy or lease the machine.
(round to the nearest dollar)
Please fill in ALL blanks.
LEASE:
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrod Harford, David Stangeland, Andras Marosi
3rd Canadian Edition
0135418178, 978-0135418178
