LeaseCanada Ltd. is considering the purchase of a fleet of cars for $22,500.00. It can borrow...

 

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LeaseCanada Ltd. is considering the purchase of a fleet of cars for $22,500.00. It can borrow at 8%. The cars will be used for 5 years. LeaseCanada Ltd. calls a leasing agent and finds that the cars can be leased for $2,500.00 per year. The corporate tax rate is 34% and the cars belong in a 30% CCA class. Assuming beginning of period payments and salvage value of $500.00, what is the net advantage to leasing? LeaseCanada Ltd. is considering the purchase of a fleet of cars for $22,500.00. It can borrow at 8%. The cars will be used for 5 years. LeaseCanada Ltd. calls a leasing agent and finds that the cars can be leased for $2,500.00 per year. The corporate tax rate is 34% and the cars belong in a 30% CCA class. Assuming beginning of period payments and salvage value of $500.00, what is the net advantage to leasing?

Answer rating: 100% (QA)

Calculating the net advantage to leasing for LeaseCanada Ltd Scenario 1 Buying the Cars Cost of cars 250000 Annual Expenses for 5 years Loan payment a... View the full answer