A service company is projecting that demand for its services will rise considerably the next three years. They can lease additional equipment for $2,000 at the begginning of every quarter for three years. Alternatively, they can purchase the equipment for 24,995 at 8% compounded quarterly. The salvage value of the equipment after three years is expected to be $5,000

- What is the present value of each offer?

Lease ______

Purchase ______

Which option would you recommend and how much better is that option in today's dollars?

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