Sutton Corporation,which has a zero tax rate due to tax loss carryforwards,is considering a 5-year,$6,000,000 bank loan to finance service equipment.The loan has an interest rate of 10% and would be amortized over 5 years,with five end-of-year payments.Sutton can also lease the equipment for five end-of-year payments of $1,790,000 each.How much larger or smaller is the bank loan payment than the lease payment? (Hint: Subtract the loan payment from the lease payment.)

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The Answer of Sutton Corporation,which has a zero tax rate due to tax loss carryforwards,is considering a 5-year,$6,000,000 bank loan to finance service equipment.The loan has an interest rate of 10% and would be amortized over 5 years,with five end-of-year payments.Sutton can also lease the equipment for five end-of-year payments of $1,790,000 each.How much larger or smaller is the bank loan payment than the lease payment? (Hint: Subtract the loan payment from the lease payment.)

Sutton Corporation,which Has a Zero Tax Rate Due to Tax