A firm is considering the purchase of a new equipment costing $5,052,025 which qualifies for a...
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A firm is considering the purchase of a new equipment costing $5,052,025 which qualifies for a 26% CCA rate. This equipment has a 4-year life after which it can be sold for $721,980. The firm can lease it for $1,131,680 per year for its useful life. Assume that the firm makes payments at the end of the year, the asset pool remains open, the tax rate is 41%, and the pre-tax cost of borrowing is 6.34%. What is the absolute value of the net advantage to leasing? $105,867 $108,513 $111,160 $113,807 $116,453 A firm is considering the purchase of a new equipment costing $5,052,025 which qualifies for a 26% CCA rate. This equipment has a 4-year life after which it can be sold for $721,980. The firm can lease it for $1,131,680 per year for its useful life. Assume that the firm makes payments at the end of the year, the asset pool remains open, the tax rate is 41%, and the pre-tax cost of borrowing is 6.34%. What is the absolute value of the net advantage to leasing? $105,867 $108,513 $111,160 $113,807 $116,453
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116453 Explanation The advantage of leasing over buying is 116453 The present va... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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