Your firm is considering either leasing or buying some new equipment. The lease payments will be $5,600 a year. The purchase price is $17,900. The equipment has a 4-year life after which time it is expected to have a resale value of $1,500. The equipment belongs in a 30 percent CCA class. Your firm borrows money at 8.6 percent, and has a 35 percent tax rate. What is the incremental cash flow for year 1 if the company decides to lease the equipment rather than purchase it?

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The Answer of Your firm is considering either leasing or buying some new equipment. The lease payments will be $5,600 a year. The purchase price is $17,900. The equipment has a 4-year life after which time it is expected to have a resale value of $1,500. The equipment belongs in a 30 percent CCA class. Your firm borrows money at 8.6 percent, and has a 35 percent tax rate. What is the incremental cash flow for year 1 if the company decides to lease the equipment rather than purchase it?

Your Firm Is Considering Either Leasing or Buying Some New