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Hans Company needs a brake machine. The machine can be purchased for $200,000 and after 10 years will have a salvage value of $25,000. The
Hans Company needs a brake machine. The machine can be purchased for $200,000 and after 10 years will have a salvage value of $25,000. The other option is for Hans Machine Company to lease the machine for 10 years by making payments of $14,000 at the beginning of every six months. If interest is 12.00% compounded annually, should Hans Company buy or lease the machine? Calculate the cost of buying and leasing the machine? Show all your work by filling in the blanks below. This picture can help you organize your work Calculate the cost of buying and leasing the machine? Show all your work. Buy Lease End/Beg P/Y C/Y N 1/Y PV PMT FV Buy Lease Initial Investment PV of Sale Proceeds NPV Initial Investment PV of Lease Payments NPV Determine the NPV for buying the machine. Initial Investment PV of Sale Proceeds NPV (Buy) Determine the NPV for leasing the machine. Initial Investment PV of lease payments NPV of leasing option. Should Hans Company buy or lease the machine? Why
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