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Fargo North is considering the purchase of some new equipment costing $66,000. This equipment has a 2-year life after which time it will be worthless. The firm uses straight-line depreciation and borrows funds at a 8 percent rate of interest. The company's tax rate is 34 percent. The firm also has the option of leasing the equipment. What is the amount of the break-even lease payment?

$23,416

$34,233

$36,994

$30,212

$40,412

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92339947

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