Eller Basketball Enterprises ( EBE ) is considering purchasing an AI enhanced basketball court monitoring system that
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Question:
Eller Basketball Enterprises EBE is considering purchasing an AI enhanced basketball court monitoring system that will allow coaches to accurately measure the speed and movements of the team's players during practices and games. The equipment would cost $ which EBE could finance with an interest only fiveyear loan. Alternatively, EBE could lease the equipment for five years at a cost of $ per year. EBE would use straightline depreciation over the fiveyear life of the system at which point the system would have zero residual salvage value. If EBE has a tax rate, what is the net advantage to leasing?
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