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Explain me how to solve this in excel please P7-12. Present Value of an Ordinary Annuity, Purchase or Lease Analysis. Fata Food Emporium decides to
Explain me how to solve this in excel please
P7-12. Present Value of an Ordinary Annuity, Purchase or Lease Analysis. Fata Food Emporium decides to obtain a new refrigerator to store its meat and produce. The refrigerator has a 15-year useful life and can be sold for $15,000 at the end of its useful life. Fata has two options: a. Purchase the Refrigerator: Purchase the refrigerator in cash for $100,000. Fata would have to pay all maintenance/insurance costs, which would be $3,000 per year. b. Lease the Refrigerator: Lease the refrigerator for a 15-year period. Annual lease payments amount to $15,000 with the first payment beginning at the end of the year. The seller will pay maintenance and insurance costs, and Fata will return the refrigerator to the seller after 15 years. Assuming that maintenance and insurance costs are paid at year-end and an interest rate of 10% compounded annually, which option should Fata chooseStep by Step Solution
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