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Discuss problem on lease payments

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Question: A Crown corporation that does not pay any taxes is evaluating whether to lease an asset or whether to purchase it; in the latter case financing could be obtained through a bank loan. Lease payments would be $4,000 per year, and loan repayments would amount to $5,000 per year, both to be incurred for the next 7 years. Can you conclude from these figures alone that leasing is to be preferred? Give reasons.

Reference no: EM131750590

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