Problem $12-25($Algo$)$ Net Present Value Analysis of a Lease or Buy Decision $[$L$012-2]$

The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:

Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $$23,000$ each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:

$\backslash$table$[[$Annual cost of servicing, taxes, and licensing,$$3,900$Problem $12-25($Algo$)$ Net Present Value Analysis of a Lease or Buy Decision $[$L$012-2]$

The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:

Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $$23,000$ each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:

$\backslash$table$[[$Annual cost of servicing, taxes, and licensing,$$3,900$

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