(Solution) - Assume in problem 15 1 that Minetello s tax rate is 40 -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Assume in problem 15-1 that Minetello's tax rate is 40% and that the equipment's CCA would be $20,000 per year. If the company leased the asset on a 2-year lease, the payment would be $22,000 at the beginning of each year. If Minetello borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should Minetello lease or buy the equipment?