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What is the amount of annual depreciation maxine

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Reference no: EM132602240

Maxine's is considering either purchasing or leasing a $600,000 piece of specialized equipment. The equipment has a life of 5 years, belongs in a 30% CCA class, and will have no residual value. The cost of debt is 12% for this purchase. A lease on the equipment for 5 years is priced at $150,000 a year. Maxine's corporate tax rate is 34%.

The lessor has a tax rate of 35%. What is the amount of annual depreciation Maxine's can claim in the first year if the firm purchases the equipment?

Reference no: EM132602240

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