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    Lease or Buy

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    Need help in answering the attached finance problem:

    Lease or Buy

    1. Lease or Buy. Your company wants to purchase a new network file server for its wide-area computer network. The server costs $75,000. It will be completely obsolete in three years. Your options are to borrow the money at 10 percent or to lease the machine. If you lease, the payments will be $27,000 per year, payable at the end of each of the next three years. If you buy the server, you can depreciate it straight-line to zero over three years. The tax is 34 percent. Should you lease or buy?

    (Question also in attachment)

    © BrainMass Inc. brainmass.com October 9, 2019, 4:08 pm ad1c9bdddf
    https://brainmass.com/business/leasing/lease-or-buy-23251

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