Your company wants to purchase a new network file server for its wide-area computer network. The server costs $24,000. Your options are to borrow the money at 10% or lease the machine. If you lease it, the payments will be $9,000 per year, payable at the beginning of each year. If you buy the server, you can apply a CCA rate of 30% per year. The tax rate is 40%. Suppose the server had a projected salvage value of $1,000 after 3 years and the firm has a WACC of 6%.

Assuming the asset pool remains open, calculate the NAL. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

NAL $

Should you lease or buy?

multiple choice

• Lease

• Buy