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Witten Entertainment is considering buying a machine that costs $551,000. The machine will be depreciated over...

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Finance

Witten Entertainment is considering buying a machine that costs$551,000. The machine will be depreciated over five years by thestraight-line method and will be worthless at that time. Thecompany can lease the machine with year-end payments of $146,000.The company can issue bonds at an interest rate of 8 percent. Thecorporate tax rate is 21 percent. What is the NAL of the lease? (Anegative answer should be indicated by a minus sign. Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

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4.2 Ratings (684 Votes)
Solution The Net advantage of the lease 2729329Note The discount rate used in    See Answer
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