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Suppose a Mining Forklift has a cost of $300,000 and will have a residual market value of $90,000 in 5 years. The risk-free interest rate
Suppose a Mining Forklift has a cost of $300,000 and will have a residual market value of $90,000 in 5 years. The risk-free interest rate is 5.1% APR with monthly compounding. a. What is the risk-free monthly lease rate for a 5-year lease in a perfect market? b. What would be the monthly payment for a 5-year $300,000 risk-free loan to purchase the Forklift? Note: Round the monthly interest rate to at least six decimal places. a. What is the risk-free monthly lease rate for a 5-year lease in a perfect market? The present value of the lease payments is $ (Round to the nearest dollar.) The risk-free monthly lease rate for a 5-year lease in a perfect market is $ (Round to the nearest dollar.) b. What would be the monthly payment for a 5-year $300,000 risk-free loan to purchase the Forklift? The monthly payment for the risk-free loan is $ (Round to the nearest dollar.)
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