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Suppose the risk-free interest rate is 6.2% APR with monthly compounding. If a $1.8 million MRI machine can be leased for 5 years for $27,000
Suppose the risk-free interest rate is 6.2% APR with monthly compounding. If a $1.8 million MRI machine can be leased for 5 years for $27,000 per month, what residual value must the lessor recover to break even in a perfect market with no risk? (Assume that the first payment is made immediately, so the payments occur at the beginning of each month.)
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