Heavee Metal, Inc. is considering leasing a computer system that costs $1 million. The lease requires annual payments of $135,000 for 10 years, starting one year from now. Heavee has a 35% tax rate. If the company purchases the computer system, it could depreciate it straight-line down to zero over 10 years. Heavee cost of secured debt is 10%. Calculate the net advantage to leasing for Heavee. MUST SHOW WORK.

Heavee Metal, Inc. is considering leasing a computer system that costs $1 million. The lease requires annual payments of $135,000 for 10 years, starting one year from now. Heavee has a 35% tax rate. If the company purchases the computer system, it could depreciate it straight-line down to zero over 10 years. Heavee cost of secured debt is 10%. Calculate the net advantage to leasing for Heavee. MUST SHOW WORK.

Heavee Metal, Inc. is considering leasing a computer system that costs $1 million. The lease requires annual payments of $135,000 for 10 years, starting one year from now. Heavee has a 35% tax rate. If the company purchases the computer system, it could depreciate it straight-line down to zero over 10 years. Heavee cost of secured debt is 10%. Calculate the net advantage to leasing for Heavee. MUST SHOW WORK.