F&R Company is analyzing the purchase of some new equipment costing $82,000, which would be...
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F&R Company is analyzing the purchase of some new equipment costing $82,000, which would be depreciated using the MACRS rates of 33.33 percent, 44.44 percent, 14.82 percent, and 7.21 percent over Years 1 to 4, respectively. The equipment can be leased for $18,600 a year for four years. The firm can borrow money at 8.5 percent and has a tax rate of 27 percent. What is the incremental annual cash flow for Year 2 if the company decides to lease the equipment rather than purchase it? A) - $22,821 B) -$21,312 C) -$21,798 OD) -$22,797 E) - $23,417
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