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Your firm is considering either leasing or buying some new equipment. The lease payments will be $25,600 a year ( Assuming payments are made at
Your firm is considering either leasing or buying some new equipment. The lease payments will be $25,600 a year (Assuming payments are made at the beginning of the year). The purchase price is $72,800. The equipment belongs in a 35 percent CCA class and has a 3-year life after which time it is expected to have a resale value of $11,500. Your firm borrows money at 11 percent, and has a 34 percent tax rate. What is the net advantage to leasing?
Select one:
A. -$1,036
B. $129
C. -$2,446
D. $2076
E. $4,467
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