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Emma runs a small factory that needs a vacuum oven for brazing small fittings | Scored 100%

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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 $4,200 per month. She can borrow at 7% APR, compounded monthly. Assuming that the oven will be used for 5 years, should she purchase the oven or should she lease it?

a. buy, since PV of the lease is $32,108 more than the cost of the oven
b. lease, since the PV of the lease is $2,212 less than the cost of the oven
c. lease, since the PV of the lease is $12,224 less than the cost of the oven
d. lease, since the PV of the lease is $8,642 less than the cost of the oven

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[Solved] Emma runs a small factory that needs a vacuum oven for brazing small fittings | Scored 100%

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  • Submitted On 24 Dec, 2014 01:11:01
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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...

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Emma runs a small factory that needs a vacuum oven for brazing small fittings | Scored 100%

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 $4,200 per month. She can borrow at 7% APR, compounded mont...

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