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Assuming 0% taxes. Equipment can be leased at $18000 per year (first payment at beginning of year) for eight years or pu
Posted: Thu May 19, 2022 12:09 am
by answerhappygod
- Assuming 0 Taxes Equipment Can Be Leased At 18000 Per Year First Payment At Beginning Of Year For Eight Years Or Pu 1 (43.74 KiB) Viewed 31 times
Assuming 0% taxes. Equipment can be leased at $18000 per year (first payment at beginning of year) for eight years or purchased at a cost of $100000. The
company has a weighted average cost of capital of 11%. A bank has indicated that it would be willing to make the loan of $100000 at a cost of 10%. There is no salvage value. Should the
company buy or lease? Lease; PV of Buy option lower than Lease option Buy: PV of Buy option lower than Lease option Buy: PV of Lease option lower than Buy option none of them Lease; PV of Lease option lower than Buy option