Omni Enterprises is considering whether to borrow funds and purchase an asset or to lease the...

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Omni Enterprises is considering whether to borrow funds and purchase an asset or to lease the asset under an operating lease arrangement. If it purchases the asset, the cost will be $48,000. It can borrow funds for four years at 11 percent interest. The asset will qualify for a 25 percent CCA. Assume a tax rate of 35 percent. The other alternative is to sign two operating leases, one with payments of $15,000 for the first two years and the other with payments of $18,500 for the last two years. The leases would be treated as operating leases. a. Compute the aftertax cost of the lease for the four years. (Negative answers should be indicated by a minus sign. Round the final answers to nearest whole doller.) Year Aftertax cost 0 1 5 15000 9750 13250 12025 6475 b. Compute the annual payment for the loan. Use Appendix D. (Round the final answer to nearest whole dollar) Annual payment 15474 c. Compute the amortization schedule for the loan. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Year Beginning Balance Annual Payments Annual Interest Repayment on Principal Ending Balance Omni Enterprises is considering whether to borrow funds and purchase an asset or to lease the asset under an operating lease arrangement. If it purchases the asset, the cost will be $48,000. It can borrow funds for four years at 11 percent interest. The asset will qualify for a 25 percent CCA. Assume a tax rate of 35 percent. The other alternative is to sign two operating leases, one with payments of $15,000 for the first two years and the other with payments of $18,500 for the last two years. The leases would be treated as operating leases. a. Compute the aftertax cost of the lease for the four years. (Negative answers should be indicated by a minus sign. Round the final answers to nearest whole doller.) Year Aftertax cost 0 1 5 15000 9750 13250 12025 6475 b. Compute the annual payment for the loan. Use Appendix D. (Round the final answer to nearest whole dollar) Annual payment 15474 c. Compute the amortization schedule for the loan. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Year Beginning Balance Annual Payments Annual Interest Repayment on Principal Ending Balance