Keshia is opening a new bookkeeping service. She is considering buying or leasing some new laptop computers. The purchase price of a laptop is $1,500 and after three years it is worthless. The annual lease rate is $550 per laptop. The value of marginal product of one laptop is $700 a year. The value of marginal product of a second laptop is $625 a year. The value of marginal product of a third laptop is $575 a year. And the value of marginal product of a fourth laptop is $500 a year.
a. How many laptops will Keshia lease or buy?
b. If the interest rate is 4 percent a year, will Keshia lease or buy her laptops?
c. If the interest rate is 6 percent a year, will Keshia lease or buy her laptops?