Trying to decide whether to lease or buy some new equipment costing $60,000. The equipment will be
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Question:
Trying to decide whether to lease or buy some new equipment costing $60,000. The equipment will be worthless after its 3 year life. The pretax cost of borrowed funds is 9 percent, the tax rate is 35 percent, and the equipment belongs in a 30 percent CCA class. The equipment can be leased for $22,000 a year. What is the net advantage to leasing?
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