Question
Your firm is considering the purchase of a new office phone system. You can either pay $31,000 now, or $950 per month for 47 months.
Your firm is considering the purchase of a new office phone system. You can either pay $31,000 now, or $950 per month for 47 months.
a. Suppose your firm currently borrows at a rate of 5% per year (APR with monthly compounding). What is the Present Value of the monthly cash flows? Which payment plan is more attractive?
b. Suppose your firm currently borrows at a rate of 16% per year (APR with monthly compounding). What is the Present Value of the monthly cash flows? Which payment plan would be more attractive in this case?
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Restoring Demand In The World Economy Trade Finance And Technology
Authors: Joseph Halevi, Jean-Marc Fontaine
1st Edition
1858984580, 9781858984582
