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Challa Event Management is trying to decide whether to lease or buy some new equipment that costs $26,700 and has a life of three years, after which it will be worthless. The aftertax discount rate is 6.3 percent. Assume the annual depreciation tax shield is $1,869 and the aftertax annual lease payment is $7,500. What is the net advantage to leasing? a. $6,763 b. $11,731 c. −$863 d. $1,795 e. −$397
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