Your company is considering the purchase of a ﬂeet of cars for $195,000. It can borrow at 8.5%. The cars will be used for four years. At the end of four years they will be worthless. You call a leasing
Agent and ﬁnd that the cars can be leased for $55,000 per year. The corporate tax rate is 34% and
The cars belong in CCA class 10 (a 30% class), what is the net advantage to leasing?
A) $6,594
B) $9,988
C) $10,134
D) $15,363
E) $21,802

Question

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The Answer of Your company is considering the purchase of a ﬂeet of cars for $195,000. It can borrow at 8.5%. The cars will be used for four years. At the end of four years they will be worthless. You call a leasing
Agent and ﬁnd that the cars can be leased for $55,000 per year. The corporate tax rate is 34% and
The cars belong in CCA class 10 (a 30% class), what is the net advantage to leasing?
A) $6,594
B) $9,988
C) $10,134
D) $15,363
E) $21,802

Your Company Is Considering the Purchase of a ﬂEet of Cars