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Evaluate opportunity costs in a decision to lease or purchase equipment. Option Lease Purchase Lease Payments per Year $100,000 - Annual Maintenance Costs $20,000 -
Evaluate opportunity costs in a decision to lease or purchase equipment.
Option | Lease | Purchase |
Lease Payments per Year | $100,000 | - |
Annual Maintenance Costs | $20,000 | - |
Purchase Price | - | $500,000 |
Salvage Value (End of Life) | $50,000 | - |
Useful Life (Years) | 5 | - |
Requirements:
Calculate the total cost of leasing the equipment over its useful life.
Determine the total cost of purchasing and operating the equipment.
Evaluate the opportunity costs and recommend whether to lease or purchase based on financial considerations.
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