A company is deciding whether to lease or buy a new truck. Given the information provided below, if the company finds out the truck maintenance cost is $3000 incurred by the lessor only, and paid at the end of each year. Net Advantage of lease (NAL) Tax CCA $2,500 30% 40% $2,000 10% 6 years The Company should (buy / lease) A/ the truck. Salvage Cost of Debt Useful life time

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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A company is deciding whether to lease or buy a new truck. Given the information
provided below, if the company finds out the truck maintenance cost is $3000
incurred by the lessor only, and paid at the end of each year.
Net Advantage of lease
(NAL)
Tax
CCA
$2,500
30%
40%
Salvage
$2,000
Cost of Debt
10%
Useful life time
6 years
The Company should (buy / lease)
A/ the truck.
Transcribed Image Text:A company is deciding whether to lease or buy a new truck. Given the information provided below, if the company finds out the truck maintenance cost is $3000 incurred by the lessor only, and paid at the end of each year. Net Advantage of lease (NAL) Tax CCA $2,500 30% 40% Salvage $2,000 Cost of Debt 10% Useful life time 6 years The Company should (buy / lease) A/ the truck.
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