Company A is considering between 2 projects of buying trucks a, borrows from bank 6 billions, interest rate is 12% per annum. Borrower makes equal annual payments for 6 years. B, hires these trucks from leasing company with fee of 1.4 billions per year. Company A is not allowed to buy these trucks when finishing this contract. This truck system could help company increase the total sale revenue by 2.6 billions per year. The operational cost rises by 0.3 billions per annum. Depreciation method applies here is average depreciation. Cooperate income tax is 20%. Company spend 1.5 billions investing in this project. Discounted rate 15% per annum.

Question: should A buy or hire this trucks system

EX 6 Company A is considering between 2 projects of buying trucks a, borrows from bank 6 billions, interest rate is 12% per annum. Borrower makes equal annual payments for 6 years. B, hires these trucks from leasing company with fee of 1.4 billions per year. Company A is not allowed to buy these trucks when finishing this contract. This truck system could help company increase the total sale revenue by 2.6 billions per year. The operational cost rises by 0.3 billions per annum. Depreciation method applies here is average depreciation. Cooperate income tax is 20%. Company spend 1.5 billions investing in this project. Discounted rate 15% per annum. Question: should A buy or hire this trucks system