Question – A co. wants a machine costing $20,000. It can either borrow the money from its bank at a pre tax cost of 7%( post tax 5%) or lease the machine for three years at an annual cost of 9300 in arrears. The tax rate is 30% and the lease payment qualify for tax relief at the time of payment.
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Have you watched my free lectures on lease and buy where the approach is all explained?