Explore BrainMass

Explore BrainMass

    Lease or Buy

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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 December 24, 2021, 5:02 pm ad1c9bdddf
    https://brainmass.com/business/leasing/lease-or-buy-23251

    Attachments

    $2.49

    ADVERTISEMENT