Manufactures reproduction parts for classic cars

Reference no: EM131117981

PonchoParts, Inc. manufactures reproduction parts for classic cars. The firm needs a computer-operated turret lathe that costs $440,000. It can borrow at 9.5%. The lathe will be used for five years, after which it will have a salvage value of $50,000. Enterprising Leasing, Inc. will lease the equipment to the firm for $100,000 per year. The firm's tax rate is 34%. If the lathe belongs in a 30% CCA class, what is the net advantage to leasing (NAL)? Correct answer should be $105. Again I need details on how to solve this, please?

Reference no: EM131117981

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