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Author Question: Emma runs a small factory that needs a vacuum oven for brazing small fittings. She can purchase the ... (Read 141 times)

Redwolflake15

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Emma runs a small factory that needs a vacuum oven for brazing small fittings. She can purchase the model she needs for $180,000 up front, or she can lease it for five years for $4200 per month. She can borrow at 7% APR, compounded monthly. Assuming that the oven will be used for five years, should she purchase the oven or should she lease it?
◦ Lease, since the present value (PV) of the lease is $2212 less than the cost of the oven.
◦ Buy, since the present value (PV) of the lease is $32,108 more than the cost of the oven.
◦ Lease, since the present value (PV) of the lease is $12,224 less than the cost of the oven.
◦ Lease, since the present value (PV) of the lease is $8642 less than the cost of the oven.


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Marked as best answer by Redwolflake15 on Jul 9, 2019

janeli

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