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On January 2, 2016, DeSantis Company is comparing two alternatives for leasing a machine. Alternative A is a lease that requires 24 quarterly payments of
On January 2, 2016, DeSantis Company is comparing two alternatives for leasing a machine. Alternative A is a lease that requires 24 quarterly payments of $750 with the first payment due on March 31,2016. Alternative B is a lease that requires five annual payments of $3,575 with the first payment due on December 31, 2016. Calculate the amount for each alternative, then determine which alternative should DeSantis choose if the appropriate discount rate is 8% compounded quarterly. Use Excel or a financial calculator for the computations. Round your answer to the nearest dollar. Alternative A:$ Alternative B: Which alternative should he choose
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