Question: CBU Computers plans to either lease or purchase a machine that costs $ 3 2 0 , 0 0 0 . The required lease payments

CBU Computers plans to either lease or purchase a machine that costs $320,000. The required lease payments are $28,000 at the beginning of each of four years. The firm's before-tax borrowing rate is 7%, WACC is 9% and its effective tax rate is 40%. The machine belongs to an asset class with a CCA rate of 25%. If the salvage value is $80,000, what is the PV of the CCA tax shield?

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