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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 that belongs in a 20% CCA class. The lease payments will be $5,600 a year. The purchase price is $15,900. The equipment has a 3-year life after which time it is expected to have a sale value of $400. Your firm borrows money at 7.5%, and has a 35% tax rate. What is the net advantage to leasing?

Reference no: EM132281237

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