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You are working for the finance department at ACME Corp. You are acquiring equipment and must decide if it is better to do a financial lease or to borrow and buy.

Initial cost; $1000

MACRS 3 year depreciation (33.33, 44.45, 14.81, 7.41)

Tax rate: 35%

Cost of debt: 6%

Annual lease payment: $250

What is the NPV of the lease relative to the borrow and buy? Please use Excel to find your answer.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92760199

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