5. Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4,000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding. Should you purchase the delivery truck or lease it? Why?
5. Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4,000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding. Should you purchase the delivery truck or lease it? Why?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:5. Your firm needs to invest in a new delivery truck. The life expectancy of the
delivery truck is five years. You can purchase a new delivery truck for an upfront cost
of $200,000, or you can lease a truck from the manufacturer for five years for a
monthly lease payment of $4,000 (paid at the end of each month). Your firm can
borrow at 6% APR with quarterly compounding.
Should you purchase the delivery truck or lease it? Why?
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