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QUESTION 1 An XYZ company makes smart devices. The company is trying to decide on whether to buy or lease some new testing equipment. The
QUESTION 1 An XYZ company makes smart devices. The company is trying to decide on whether to buy or lease some new testing equipment. The costs for relevant itmes are shown below Buy 350,000 23,000 Lease Initial cost Annual Operating cost, S per year Annual lease, $ per year Salvage value, $ Life, Year 8,000 85,000 40,000 Assume an interest rate of 8% and match the following questions with the closest correct answers from the given list. What is the present worth of cost of leasing? What is the present worth of cost of buying? A.-85,000(P/A,8%,7)-8,000(P/A8%,8) ..-85.000(BA. 8%, 7)-8,000(P A. 8%, 8)-85.000 Y Should the company lease or buy the new equipment? Y Present worth equation for leasing option C. $534,437 D-$573,486 E -$503,783 -619437 G. Buy S460,569 Lease .-85.000(BA. 8%.8)-8,000(BA, 8%, 8)-85.000
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