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Dear Tutor,
I would like to ask a question about example 3 in Chapter 9 ( Lease versus Buy).
The question mentioned : “ Buying it will involve borrowing money at an after tax interest cost of 7%”.
In the answer you provided, during the calculation i do not see any interest cost ( for borrowing the money from the bank) . But instead of 7% was used as discount factor.
Q1: Why there is no interest from borrowing in the calculation?
Thank you
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