Question
Your landscaping company can least a truck for $7,800 a year (paid at year-end) for 6 years. It can instead buy the truck for $38,000.
Your landscaping company can least a truck for $7,800 a year (paid at year-end) for 6 years. It can instead buy the truck for $38,000. The truck will be valueless after 6 years. The interest rate your company can earn on its funds is 7%.
a. what is the present value of the cost of leasing?(Do not round intermediate calculations. Round your answer to 2 decimal places).
b. is it cheaper to buy or lease?
c. present value of lease?
d. is it now cheaper to buy or lease?
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Finance For Nonfinancial Managers Beginners Handbook For Finance
Authors: Murugesan Ramaswamy
1st Edition
1516973801, 978-1516973804
