Annual Lease Payment (1st Payment Due When the Lease Is

Multiple Choice

Annual lease payment (1st payment due when the lease is signed) $71 500CCA rate 30% Company's borrowing rate 10% Company's tax rate 40% Company's cost of capital 6.5% Investment Tax Credit Rate 10%New Brunswick Salmon Farms has asked for your opinion on whether to lease or purchase this asset. What should you say?

A) It does not matter whether New Brunswick Salmon Farms leases it or purchases it - the company would be equally well off either way
B) New Brunswick Salmon Farms would be better off by leasing it
C) New Brunswick Salmon Farms would be better off by purchasing it
D) There is insufficient information to determine which option would be better for New Brunswick Salmon Farms