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Equipment through the bank loan at an interest rate

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Puan Bunga Lawang is working in a medical research laboratory and is evaluating the decision to acquire the medical research equipment. The cost of the equipment is RM4,800,000 and it would be depreciated on a straight-line basis. Due to the heavy usage, it is estimated that at the end of four years the machine will be completely valueless. Puan Bunga Lawang may lease the equipment at RM1,430,000 per year for four years or purchase the equipment through the bank loan at an interest rate of 8%. The tax rate is 22%.

Reference no: EM133113125

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