Question
Your landscaping company can lease a truck for $7,850.00 a year for 8 years. It can instead buy the truck for $38,344.45. The truck will
| Your landscaping company can lease a truck for $7,850.00 a year for 8 years. It can instead buy the truck for $38,344.45. The truck will be valueless after 8 years. |
| a. | What is the present value of the lease payments, If the interest rate your company can earn on its funds is 8.00%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Present value | $ |
| b. | Is it cheaper to buy or lease? | ||||
|
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Financial Management Core Concepts
Authors: Ray Brooks, Raymond Brooks
1st Edition
0321155173, 9780321155177
