Question: 71) ABC inc needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value.

71) ABC inc needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value. The equipment costs $930,000. The firm can lease it for $245,000 a year, or it can borrow the money to purchase the equipment at 9%. The firm's tax rate is 39%. The CCA rate is 20% (Class 8). What is the net advantage to leasing?

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