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Altrucell Corporation wants to decide on purchase or lease of a photocopy machine. The price of the machine now is RM8,000 and it would last
Altrucell Corporation wants to decide on purchase or lease of a photocopy machine. The price of the machine now is RM8,000 and it would last only 9 years. After which it can be sold as scrap at RM1,200. The machine will need an annual maintenance which will cost RM600 per annum to ensure smooth running of the machine. On the other hand, the cost of leasing the same machine will be RM1,400 per annum. The company will not need to pay for maintenance cost for the machine during the leasing period. Given that the current cost of capital is 10% p.a., decide on which option will be best for the company
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