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Suppose that you considering a proposal from one of your managers who insists that your firm needs to invest in a new delivery truck, whose
Suppose that you considering a proposal from one of your managers who insists that your firm needs to invest in a new delivery truck, whose life expectancy would be 5 years. The upfront cost of the truck is $200,000. Another option you're considering is to simply lease a truck for that period of time (five years). The monthly lease payment would be $4,000 (which you would pay at the end of each month). Suppose you can borrow at 6% APR with quarterly compounding. In a few sentences, please explain the process through which you would decide whether to purchase or lease the truck. 1 B I T 5
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