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YOUR SMALL COMPANY IS CONSIDERING WHETHER TO BUY A NEW AUTOMOBILE OR TO LEASE IT. YOU HAVE DETERMINED THAT TO PURCHASE A NEW VEHICLE IT

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YOUR SMALL COMPANY IS CONSIDERING WHETHER TO BUY A NEW AUTOMOBILE OR TO LEASE IT. YOU HAVE DETERMINED THAT TO PURCHASE A NEW VEHICLE IT WILL COST $21 000. AFTER 8 YEARS OF USE, THE VEHICLE CAN BE SOLD FOR $5 500. THE COST TO LEASE THE SAME VEHICLE IS FOUND TO BE $3 000 PER YEAR FOR A 4-YR LEASE AFTER A DELIVERY PAYMENT OF $2 000. IT IS EXPECTED THAT THE ANNUAL OPERATING AND MAINTENANCE WILL COST ABOUT $1 800 WHETHER THE VEHICLE IS PURCHASED OR LEASED. SHOULD YOU BUY OR LEASE? USE PRESENT WORTH ANALYSIS TO JUSTIFY YOUR ANSWER ASSUME THE INTEREST RATE IS 8% COMPOUNDED ANNUALLY. Question 6) Draw Cash Flow Diagram Question 7) Determine the transaction in Present worth value Question 8) Determine the transaction in Future worth value Question 9) Determine the transaction in Annual worth value Question 10) Which system would you select and why

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