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Heidi Inc. is considering whether to lease or purchase a piece of equipment. The total cost to lease the equipment will be $126,000 over its
Heidi Inc. is considering whether to lease or purchase a piece of equipment. The total cost to lease the equipment will be $126,000 over its estimated life, while the total cost to buy the equipment will be $80,000 over its estimated life. At Heidi's required rate of return, the net present value of the cost of leasing the equipment is $79,500 and the net present value of the cost of buying the equipment is $73,000. Based on financial factors, Heidi should: Multiple Choice lease the equipment, saving $46,000 over buying. O buy the equipment, saving $46,000 over leasing. o buy the equipment, saving $6,500 over leasing. a lease the equipment, saving $6,500 over buying
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