Should you lease or buy asset

Reference no: EM131959655

Qusetion: Your company wants to purchase a new network file server for its wide-area computer network. The server costs $24000. Its will be obsolete in three years. Your options are to borrow the money at 10 percent or lease the machine. If you lease it, the payments will be $9000 per year, payable at the begining of each year, If you buy the server, you can apply a CCA rate of 30 percent per year. The tax rate is 40 percent. Assuming the asset pool remains CLOSED, should you lease or buy?

Reference no: EM131959655

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