zero salvage value, Financial Management

Big Joe's is changing a piece of equipment.  The equipment will cost $5,000 and has a 5 year life.  The equipment can be leased for annual payment of $1,295 paid at the starting of each year, or it can be purchased and financed at an interest rate of 10% with annual loan payments of $1,319.  There is zero salvage value.  Big Joe's tax rate is 40%.  The equipment has a 20% CCA rate.  What should Big Joe do?

 

Posted Date: 3/22/2013 1:34:05 AM | Location : United States







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