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The financial manager of Haze company is thinking about introducing new equipment in next 4 years. If buying, the market price of the equipment is 2000 thousands and the tax law requires the

The financial manager of Haze company is thinking about introducing new equipment in next 4 years. If buying, the market price of the equipment is 2000 thousands, and the tax law requires the equipment depreciate in 10 years in straight-line method, after 4 years the residual value of the equipment is expected as 900 thousands. If leasing, the rental is 400 thousands per year. Will you advise the financial manager to buy or lease? (The tax rat of Haze Company is 30%) If you were the financial manager of leasing company, will you accepted the rental agreement? Please give the explanation (The tax rat of leasing company is 20%. Discount rate is 5%)

Aug 30 2020 View more View Less

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