Pearl Excavating Inc. is purchasing a bulldozer. The equipment has a price of $92,800. The manufacturer has offered a payment plan that would allow Pearl to make 10 equal annual payments of $16,424.13, with the first payment due one year after the purchase. Pearl could borrow $92,800 from its bank to finance the purchase at an annual rate of 9%. Should Pearl borrow from the bank or use the manufacturer’s payment plan to pay for the equipment? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 7%.) Manufacturer's rate %
Pearl Excavating Inc. is purchasing a bulldozer. The equipment has a price of $92,800. The manufacturer has offered a payment plan that would allow Pearl to make 10 equal annual payments of $16,424.13, with the first payment due one year after the purchase. Pearl could borrow $92,800 from its bank to finance the purchase at an annual rate of 9%. Should Pearl borrow from the bank or use the manufacturer’s payment plan to pay for the equipment? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 7%.) Manufacturer's rate %
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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Pearl Excavating Inc. is purchasing a bulldozer. The equipment has a price of $92,800. The manufacturer has offered a payment plan that would allow Pearl to make 10 equal annual payments of $16,424.13, with the first payment due one year after the purchase.
Pearl could borrow $92,800 from its bank to finance the purchase at an annual rate of 9%.
Should Pearl borrow from the bank or use the manufacturer’s payment plan to pay for the equipment? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 7%.)
| Manufacturer's rate | % |
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