Question
Ritchie Coliseum is looking to acquire new treadmills and stair-steppers. They can buy them from Life Fitness for $62,500 and assume the shelf-life is 8
Ritchie Coliseum is looking to acquire new treadmills and stair-steppers. They can buy them from Life Fitness for $62,500 and assume the shelf-life is 8 years. This option will also come with $4,000 of upkeep costs per year. The other option they have is to rent the treadmills and stair-steppers that come with a warranty for $15,000 per year for the same time period of 8 years. The cost of capital is 8.24%. Should they buy or rent and why? Group of answer choices RENT, because the NPV is -85,279 which is higher than the buy option. BUY, because the NPV is -85,240 which is higher than the rent option.. BUY, because the NPV is -$85,279 which is higher than the rent option. BUY, because the NPV is -$85,240 which is higher than the rent option. RENT, because the NPV is -$85,240 which is higher than the buy option.
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