Question
A firm can lease a truck for 4 years at a cost of $46,000 annually. It can instead buy a truck at a cost of
| A firm can lease a truck for 4 years at a cost of $46,000 annually. It can instead buy a truck at a cost of $96,000, with annual maintenance expenses of $26,000. The truck will be sold at the end of 4 years for $36,000. |
| a. | Calculate present value if the discount rate is 12%?(Do not round intermediate calculations. Round your answers to 2 decimal places.) |
| Present Value | |
| Buy | $ |
| Lease |
| b. | Which is the better option? |
|
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Fundamentals Of Financial Management
Authors: Richard Bulliet, Eugene F Brigham, Brigham/ Houston
11th Edition
1111795207, 9781111795207
