Solution-Net advantage to leasing, The corporate tax rate

Net advantage to leasing

Reference no: EM131115469

Your company is considering the purchase of a fleet of cars for $195,000. It can borrow at 8.5%. The cars will be used for four years. At the end of four years they will be worthless. You call a leasing agent and find that the cars can be leased for $55,000 per year. The corporate tax rate is 34% and the cars belong in CCA class 10 (a 30% class), what is the net advantage to leasing?

Reference no: EM131115469

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Net advantage to leasing

Reference no: EM131115469

Reference no: EM131115469

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