Edinburgh Overnight Delivery Service would like to acquire 40 vans for its business. It can buy each van for $33,000, depreciate it completely over 5 years, and then sell it for $9,000. The tax rate of Edinburgh is 30%, and its cost of debt is 8%. Glasgow Rental Company will lease these vans to Edinburgh for a period of 5 years at the annual rate of $6,400, paid in advance. Edinburgh will get the tax benefits of the lease at the end of each year. Should Edinburgh buy or lease these vans?,Thank you for the clarity!
Paper#2628 | Written in 18-Jul-2015Price : $25