1. Barney & Stone Limited is about to purchase $350,000 of capital assets. The assets have an expected lifespan of five years, and will be worthless after that time. The appropriate CCA rate is 35%, and lease terms have been offered by Manfred Leasing, with a payment of $74,400 per year. Barney & Stone could obtain a new loan for the assets, at 6.25 percent, and has sufficient tax loss carryovers to offset any potential taxable income the firm might have for the next five years. 
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3. What is the net advantage to leasing?

Answer rating: 100% (QA)

To determine the net advantage to leasing we need to compare the costs of leasing with the costs of ... View the full answer