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Acadian Leisure Tours and Resorts (ALTR) requires a new Tour Bus. The Vice President considering two options: 1. Buy a brand new 56 Passenger Coaches

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Acadian Leisure Tours and Resorts (ALTR) requires a new Tour Bus. The Vice President considering two options: 1. Buy a brand new 56 Passenger Coaches for $560,000 with monthly servicing costs of $1,200 (payable at the end of each month) and resell the bus for $240,000 after 6 years, or 2. Pay a contractor $12,000 at the end of each month for 6 years, to provide a vehicle. ALTR evaluates investments based upon net present value analysis. At 18% APR compounded monthly, which is the better option

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