Calculate the net advantage of lease

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Question: A company is deciding whether to lease or buy new equipment. The equipment can be purchased for $75,000 or leased for a 7-year period for $10,250 per year (due at the beginning of each year). The firm can borrow at an after tax rate of 9%. If purchased, the company will incur insurance and maintenance costs of $750 per year. The equipment has a CCA rate of 26%. Salvage value in 7 years is expected to be $3,500. The company's marginal tax rate is 36%. Calculate the Net Advantage of Lease (NAL).

Round the the Net Advantage of Lease to 2 decimals (e.g 22.05), and the unit is $.

Reference no: EM133432371

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