Company, Inc. is considering acquiring a new piece of equipment The new piece of

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Company, Inc. is considering acquiring a new piece of equipment The new piece of equipment costs $150. The company can lease or buy.   If it leases the lease does not to be capitalized, it will be a 2-year lease, and the payment will be $85 at the beginning of each year. If the company buys it can borrow the full $150 at 8% interest on the loan. Assume the tax rate at 40%. Depreciation is $75 per year. No salvage value; equipment is worth nothing after 2 years. Should Company, Inc. lease or buy the equipment? Company, Inc. is considering acquiring a new piece of equipment The new piece of equipment costs $150. The company can lease or buy.   If it leases the lease does not to be capitalized, it will be a 2-year lease, and the payment will be $85 at the beginning of each year. If the company buys it can borrow the full $150 at 8% interest on the loan. Assume the tax rate at 40%. Depreciation is $75 per year. No salvage value; equipment is worth nothing after 2 years. Should Company, Inc. lease or buy the equipment?

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