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Assuming 0% taxes. Equipment can be leased at $18000 per year (first payment at beginning of year) for eight years or purchased at a cost
Assuming 0% taxes. Equipment can be leased at $18000 per year (first payment at beginning of year) for eight years or purchased at a cost of $100000. The company has a weighted average cost of capital of 11%. A bank has indicated that it would be willing to make the loan of $100000 at a cost of 10%. There is no salvage value.
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To determine whether the company should buy or lease the equipment we need to compare the present va...
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
