Knight Motors is considering either leasing or buying some new equipment. The lease payments would be $14,500

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Knight Motors is considering either leasing or buying some new equipment. The lease payments would be $14,500 a year for 3 years. The purchase price is $52,000. The equipment has a 3-year life and then is expected to have a resale value of $12,000. Knight Motors uses straight-line depreciation, borrows money at 9 percent, and has a 35 percent tax rate. What is the net advantage to leasing?

Posted Date: Dec 08, 2021 12:42 PM

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Knight Motors is considering either leasing or buying some new equipment. The lease payments would be $14,500

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1 Cash flow in year 0 in case of purchase 52000 2 Cash flow in year 1 De... View the full answer

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