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Home Q & A Board Other Fields Homework Help Business Finance
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meganA meganA
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Posts: 448
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4 years ago
Use the information for the question(s) below.

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 $4000 (paid at the end of each month).  Your firm can borrow at 6% APR with quarterly compounding.


The monthly discount rate that you should use to evaluate the truck lease is closest to:

▸ 0.498%

▸ 0.487%

▸ 0.500%

▸ 0.512%
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
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#1
4 years ago
0.498%
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