The company would like to buy a machine for 8 mil USD . Machine would be depreciated for 3 years using straight line method. Company has following options.
Loan; maturity 3 years interest 5.841%% p.m equal anuuity yearly payment.
Leasing; leasing coeficient 1.2 advanced payment 35% maturity 3 years annual payment corporate tax is 20% .
a) Modify the monthly interest rate to yearly based interest rate.
b) Which instrument on the marker would be cheaper for company?