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Problem:

Learning University is tax-exempt. They need a new mini-bus for the campus. They can either buy or lease the bus. A new bus costs $123,000. It has a 6-year life with no salvage value. Depreciation is straight-line over 6 years. The interest rate (before taxes) is 8%. If they lease, there will be 6 prepaid lease payments.

Required:

Question: What is the maximum lease payment that LU will accept?

Note: Please explain comprehensively and give step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169832

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