Pansy and Slick Inc. manufactures reproduction parts for classic cars. The firm needs a computer-operated turret lathe
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Question:
Pansy and Slick Inc. manufactures reproduction parts for classic cars. The firm needs a computer-operated turret lathe that costs $440,000. It can borrow at 9.5%. The lathe will be used for five years, after which it will have a salvage value of $50,000. Enterprising Leasing, Inc. will lease the equipment to the firm for $100,000 per year. The firm's tax rate is 34%. If the lathe belongs in a 30% CCA class, what is the net advantage to leasing (NAL)?
A) $8,235B) -$3,379C) $105D) -$1,130E) $3,563
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