Grey Sky Construction needs a piece of equipment that costs $60,000. Grey Sky either can lease the
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Question:
Grey Sky Construction needs a piece of equipment that costs $60,000. Grey Sky either can lease the equipment for two years at $31,000 per year, paid at the beginning of the year, or borrow $60,000 from a local bank at 9% and buy the equipment. The annual CCA on the equipment is $30,000. The equipment is expected to have no value at the end of the second year. The company's tax rate is 30%. Should Grey Sky buy or lease the equipment? What is the NAL?
Please provide a solution to how NAL = $1,454.65. Thank you.
Related Book For
Financial Management Theory and Practice
ISBN: 978-1337902601
16th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
Posted Date: