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A company is deciding whether to lease or buy new equipment. The equipment can be...

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Finance

A company is deciding whether to lease or buy new equipment. The equipment can be purchased for $95,000 or leased for a 8-year period for $11,750 per year (due at the beginning of each year). The firm can borrow at 8%. The equipment has a CCA rate of 26%. Salvage value in 8 years is expected to be $4,500. The company's marginal tax rate is 33%. Calculate PV CCATS.

A company is deciding whether to lease or buy new equipment. The equipment can be purchased for $80,000. If purchased, maintenance costs are expected to be $10,500 at the end of year 8. Cost of debt is 10%, Tax is 35%, and CCA rate is 26%. Calculate the PV of Maintenance.

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