In: Finance
Lease versus Buy
Big Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply:
MACRS | |
Year | Allowance Factor |
1 | 0.3333 |
2 | 0.4445 |
3 | 0.1481 |
4 | 0.0741 |
What is the NAL of the lease? Round your answer to the nearest dollar.