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What is the net advantage to leasing

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Your firm is considering either leasing or buying some new equipment. The lease payments will be $25,600 a year with the first payment due upon signing the lease contact. The purchase price is $72,800. The equipment belongs in a 35 percent CCA class and has a 3-year life after which time it is expected to have a resale value of $9,500. Your firm borrows money at 11 percent, and has a 34 percent tax rate. What is the net advantage to leasing?

Reference no: EM133005014

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