Bridge Water Engineering needs to acquire $36,000 worth of new equipment. The equipment has a 4-year life after which time it will be worthless. The equipment belongs to a 30 percent CCA class and can be leased for $9,500 a year. The firm can borrow money at 8 percent and has a 34 percent tax rate. What is the incremental annual cash flow for year 3 if the company decides to lease the equipment rather than purchase it?

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The Answer of Bridge Water Engineering needs to acquire $36,000 worth of new equipment. The equipment has a 4-year life after which time it will be worthless. The equipment belongs to a 30 percent CCA class and can be leased for $9,500 a year. The firm can borrow money at 8 percent and has a 34 percent tax rate. What is the incremental annual cash flow for year 3 if the company decides to lease the equipment rather than purchase it?

Bridge Water Engineering Needs to Acquire $36,000 Worth of New