Question
baker company needs to decide whether to buy or lease office equipment . baker can buy the office equipment for 250000 today , which would
baker company needs to decide whether to buy or lease office equipment . baker can buy the office equipment for 250000 today , which would require that they borrow the funds from the bank . the bank will charge them 8% and require equal monthly payments over 4 years . they also have the option of leasing the office equipment for either 3 years or 5 years. if they choose to lease for 3 years , they will have to put 10000 down today and make monthly lease payment of 7500 and they can purchase the office equipment after the last payment for 5000. if they opt for the 5-year lease , they need to put 6000 down today and make monthly payments of 5000 and they can purchase the office equipment after the last payment for 3000 . which option is the best ? explain with numerical analysis
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