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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 $130,000 over its
Heidi Inc. is considering whether to lease or purchase a piece of equipment. The total cost to lease the equipment will be $130,000 over its estimated life, while the total cost to buy the equipment will be $78,000 over its estimated life. At Heidis required rate of return, the net present value of the cost of leasing the equipment is $82,800 and the net present value of the cost of buying the equipment is $77,000. Based on financial factors, Heidi should:
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