How do you set this up to evaluate the better option

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Reference no: EM131573642

Capital purchase by for-profit item $400,000, straight line basis for depreciation over 5 years to a zero salvage value, borrowing full amount @ 15% rate for 5 years, after tax cost of debt equals 9%. Tax rate is 40%. Lease option before-tax payments would be $80,000 for five years.

How do you set this up to evaluate the better option?

Reference no: EM131573642

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