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Question: Assume in problem 15-1 that Minetellos tax rate is 40%

09 Sep 2024,9:35 PM

 

Assume in problem 15-1 that Minetellos tax rate is 40% and that the equipments CCA would be $20,000 per year. If the company leased the asset on a 2-year lease, the payment would be $22,000 at the beginning of each year. If Minetello borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should Minetello lease or buy the equipment?

 

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