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Devon Corp. is trying to decide whether to lease or purchase a piece of equipment. The total cost lease the equipment will be $151,000 over
Devon Corp. is trying to decide whether to lease or purchase a piece of equipment. The total cost lease the equipment will be $151,000 over its estimated life, while the total cost to buy the equipment will be $120,400 over its estimated life. At Devon's required rate of return, the net present value of the cost of leasing the equipment is $108,400 and the net present value of the cost of buying the equipment is $120,000. Based on financial factors, Devon should: Multiple Choice lease the equipment, saving $30,600 over buying. buy the equipment, saving $30,600 over leasing. lease the equipment, saving $11,600 over buying. buy the equipment, saving $11,600 over leasing. Devon Corp. is trying to decide whether to lease or purchase a piece of equipment. The total cost lease the equipment will be $151,000 over its estimated life, while the total cost to buy the equipment will be $120,400 over its estimated life. At Devon's required rate of return, the net present value of the cost of leasing the equipment is $108,400 and the net present value of the cost of buying the equipment is $120,000. Based on financial factors, Devon should: Multiple Choice lease the equipment, saving $30,600 over buying. buy the equipment, saving $30,600 over leasing. lease the equipment, saving $11,600 over buying. buy the equipment, saving $11,600 over leasing
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