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A small strip - mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the shell will
A small stripmining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the shell will cost $ and is expected to have a $ salvage value after years. Alternatively, the company can lease a clamshell for only $ per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other stripmining companies whenever possible, an activity that is expected to yield revenues of $ per year. If the companys MARR is per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. Include a minus sign if necessary.
A small stripmining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the shell will cost $ and is expected to have a $ salvage value after years. Alternatively, the company can lease a clamshell for only $ per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other stripmining companies whenever possible, an activity that is expected to yield revenues of $ per year. If the companys MARR is per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. Include a minus sign if necessary.
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