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Your friend Harold is trying to decide whether to buy or lease his next vehicle. He bas gathered information about each option but is not
Your friend Harold is trying to decide whether to buy or lease his next vehicle. He bas gathered information about each option but is not sure how to compare the atternatives. Purchasing a new vehicle will cost $29,500 and Harold expects to spend about $800 per year in maintenance costs. He would keep the vehicle for five years and estimates that the salvage value will be $11,700. Alternatively. Harold could lease the same vehicle for five years at a cost of $3.835 perivear, including maintenance. Assume a discount rate of 10 percent Required: 1. Calculate the net present value of Harold's options. 2. Advise Harold about which option he should choose
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