South African Airlines is contemplating leasing a high-tech tracker for its fleet of airplanes. Leasing is a very common practice with expensive, high-tech equipment. The scanner costs $6.3 million and it qualifies for a 30% CCA rate. Because of the rapid progression of technology, the high-tech tracker will be valued at $0 in 4 years. You can lease it for $1.875 million per year for four years. Assume that the assets pool remains open and payments are made at the end of the year. Assuming a tax rate of 37%. You can borrow at 8% pre-tax. Should you lease or buy

Answer rating: 100% (QA)

As nal is positive I would go for lease Here is the ... View the full answer