Read paragraph and tell should you lease or buy

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Question: Your company wants to purchase a new network file server for its wide-area computer network. The server costs Br. 75,000. It will be completely obsolete in three years. Your options are to borrow the money at 10% or to lease the machine. If you lease, the payments will be Br. 27,000 per year, payable at the end of each of the next three years. If you buy the server, you can depreciate it straight-line to zero over three years. The tax rate is 34%. Should you lease or buy?

Reference no: EM131504534

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