Depreciated for three years using three-years macrs method

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Reference no: EM132039916

The company would like to buy a machine for 20 mil. USD. Machine would be depreciated for 3 years using 3-years MACRS method. Company has following options:

Loan: maturity 3 years, monthly payment, interest 6 % p.a., equal annuity payment

Leasing: leasing coefficient 1.3; advanced payment 30 %; maturity 3 years; monthly payment Corporate tax rate is 19 %.

Which type of financing is better for us?

Reference no: EM132039916

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