Breakstone, Inc. needs to acquire $280,000 worth of equipment. The equipment has a 5-year life and will be worthless after that time. This equipment belongs in a 35 percent CCA class and can be leased from Mangrove Leasing for $64,400 a year. Breakstone borrows money at 8.25 percent, and has sufficient tax loss carryovers to offset any potential taxable income the firm might have for the next five years. What is the net advantage to leasing?

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The Answer of Breakstone, Inc. needs to acquire $280,000 worth of equipment. The equipment has a 5-year life and will be worthless after that time. This equipment belongs in a 35 percent CCA class and can be leased from Mangrove Leasing for $64,400 a year. Breakstone borrows money at 8.25 percent, and has sufficient tax loss carryovers to offset any potential taxable income the firm might have for the next five years. What is the net advantage to leasing?