Rufus Brewing Company is considering the lease of new office furniture from National LeasingLimited. The furniture costs $11 250 and has an estimated economic life 5 years. The CCA rate is20% and Rufus Brewinghas a borrowing rate of 9% and a cost of capital of 8%. National Leasing's borrowing rate is 8.5% and its cost of capital is 6.6%. Both companies have a tax rate of 35%. What is the value of the tax shield for Rufus Brewing?
A) $3 028
B) $3 369
C) $2 708
D) $2 932

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The Answer of Rufus Brewing Company is considering the lease of new office furniture from National LeasingLimited. The furniture costs $11 250 and has an estimated economic life 5 years. The CCA rate is20% and Rufus Brewinghas a borrowing rate of 9% and a cost of capital of 8%. National Leasing's borrowing rate is 8.5% and its cost of capital is 6.6%. Both companies have a tax rate of 35%. What is the value of the tax shield for Rufus Brewing?
A) $3 028
B) $3 369
C) $2 708
D) $2 932

Rufus Brewing Company Is Considering the Lease of New Office