Question: Carmichael Cleaners needs a new steam Bahing machine that costs $100,000 The company is evaluating whener should leate or purchase the machine. The equipment falls

 Carmichael Cleaners needs a new steam Bahing machine that costs $100,000

Carmichael Cleaners needs a new steam Bahing machine that costs $100,000 The company is evaluating whener should leate or purchase the machine. The equipment falls into the MACRS 3-year claws, and it would be used for 3 years and then sold, because the firm plans to move to a new facility at time. The estimated value of the equipment after 3 years is $30.000 A maintenance contract on the equipment would cost $3.000 per year, payable at the beginning of each year. Alternatively, the firm could lease the woment for 3 years for a loose payment of 529.000 per year payable at the beginning of each yow The Lease would include maintenance. The firm is in the 20% tax bracket and it could obtain a year simple interest an whores payable at the end of the year to purchase the equipment a before tax cost of 10 If there is a postive Net Advantage to Leasing the firm willease the equipment Othere will buy it What NAL? (Note Assume MACRS rates for a 15403333 044501001 and 00741) 5.734 55023 36 324 55640 $6972 Carmichael Cleaners needs a new steam Bahing machine that costs $100,000 The company is evaluating whener should leate or purchase the machine. The equipment falls into the MACRS 3-year claws, and it would be used for 3 years and then sold, because the firm plans to move to a new facility at time. The estimated value of the equipment after 3 years is $30.000 A maintenance contract on the equipment would cost $3.000 per year, payable at the beginning of each year. Alternatively, the firm could lease the woment for 3 years for a loose payment of 529.000 per year payable at the beginning of each yow The Lease would include maintenance. The firm is in the 20% tax bracket and it could obtain a year simple interest an whores payable at the end of the year to purchase the equipment a before tax cost of 10 If there is a postive Net Advantage to Leasing the firm willease the equipment Othere will buy it What NAL? (Note Assume MACRS rates for a 15403333 044501001 and 00741) 5.734 55023 36 324 55640 $6972

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