Firm is considering leasing a radiographic x-ray machine

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Your firm is considering leasing a radiographic x-ray machine. The lease lasts for three years. The lease calls for four payments of $25,000 per year with the first payment occurring immediately. The computer would cost $140,000 to buy and would be straight-line depreciated to a zero salvage value over three years. The actual salvage value is negligible. The firm can borrow at a rate of 12%. The corporate tax rate is 40%.

Reference no: EM13849335

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