What is the amount of the break-even lease payment

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Reference no: EM131187929

Fargo North is considering the purchase of some new equipment costing $75,000. This equipment has a 2-year life after which time it will be worthless. The firm uses straight-line depreciation and borrows funds at a 8 percent rate of interest. The company's tax rate is 35 percent. The firm also has the option of leasing the equipment. What is the amount of the break-even lease payment?

$39,277

$28,460

$42,038

$45,456

$35,256

Reference no: EM131187929

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