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Sutton Corporation




Sutton Corporation;Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards, is considering a 5-;year, $6,000,000 bank loan to finance service equipment. The loan has an interest rate of 10%;and would be amortized over 5 years, with 5 end-of-year payments. Sutton can also lease the;equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the;bank loan payment than the lease payment? Note: Subtract the loan payment from the lease;payment.


Paper#28398 | Written in 18-Jul-2015

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