Question
Use the information for the question(s) below. Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is
Use the information for the question(s) below.
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding.
3) The present value of the lease payments for the delivery truck is closest to (this asks you to calculate the PV based on the lease terms so that we can compare it with the $200,000 to know whether we should buy or lease):
Group of answer choices
$207,050
$206,900
$207,680
$198,420
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