If reynolds borrowed and bought the bank would charge 10


Assume that Reynolds' tax rate is 40 percent and the equipment's depreciation would be $100 per year. If the company leased the asset on a 2-year lease, the payment would be $110 at the beginning of each year. If Reynolds borrowed and bought, the bank would charge 10 percent interest on the loan. Should Reynolds lease or buy the equipment?

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Finance Basics: If reynolds borrowed and bought the bank would charge 10
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