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You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease the equipment to you for $10.000 per

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You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease the equipment to you for $10.000 per year it you sign a guaranteed 5 -year lease (the lease is paid at the end of each year). The company would also maintain the equipment for you as part of the lease. Alternatively. you could buy and maintain the equipment yourself. The cash fiows from doing so are listed below (the equipment has an economic lifa of 5 vears) If vour discount rate is 7.3%, what shouid you do? The net present value of the leasing alternative is 9

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