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Hi could you please help me to solve this question? Question 3 Assume Lease A has a 2,000 up front charge, and lasts for 18
Hi could you please help me to solve this question?
Question 3 Assume Lease A has a 2,000 up front charge, and lasts for 18 years with an annual cost of 1000 per year. Lease B costs 2,500 up front, lasts for 22 years, and has an annual charge of 900 per year. The interest rate is 12% per annum. a) What is the PV cost of each lease? b) What is the rental equivalent of each lease? c) Which lease is a better purchase if you assume no value to flexibility and that lease costs will remain constant in the futureStep by Step Solution
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