Question: Question 1 (2 points) Consider a firm A that wishes to acquire an equipment. The equipment is expected to reduce costs by $4200 per year.

Question 1 (2 points) Consider a firm A that wishes to

Question 1 (2 points) Consider a firm A that wishes to acquire an equipment. The equipment is expected to reduce costs by $4200 per year. The equipment costs $26000 and has a useful life of 5 years. If the firm buys the equipment, they will depreciate it straight-line to zero over 5 years and dispose of it for nothing. They can lease it for 5 years with an annual lease payment of $4000. If the after-tax interest rate on secured debt issued by company A is 3% and tax rate is 15%, what is the Net Advantage to Leasing (NAL)?(keep two decimal places) Your

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