Cool Treats is considering either leasing or buying a new $30,900 freezer unit. The lessor will charge $11,900 a year for a two-year lease. The freezer has a two-year life after which time it is expected to have a resale value of $11,500. Cool Treats uses straight-line depreciation, borrows money at 7.5 percent, and has sufficient operating losses to offset any potential taxable income the firm might have over the next four years. What is the net advantage to leasing?

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The Answer of Cool Treats is considering either leasing or buying a new $30,900 freezer unit. The lessor will charge $11,900 a year for a two-year lease. The freezer has a two-year life after which time it is expected to have a resale value of $11,500. Cool Treats uses straight-line depreciation, borrows money at 7.5 percent, and has sufficient operating losses to offset any potential taxable income the firm might have over the next four years. What is the net advantage to leasing?

Cool Treats Is Considering Either Leasing or Buying a New