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Your firm is considering the purchase of a new office phone system. You can either pay $32,000 now, or $ 950 per month for 41

Your firm is considering the purchase of a new office phone system. You can either pay

$32,000 now, or $ 950 per month for 41months.

a. Suppose your firm currently borrows at a rate of

7% per year(APR with monthlycompounding). Which payment plan is moreattractive?

b. Suppose your firm currently borrows at a rate of 16 % per year(APR with monthlycompounding). Which payment plan would be more attractive in thiscase?

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