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Begonia Begonia
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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 present value (PV) of the lease payments for the delivery truck is closest to:

▸ $206,900

▸ $207,050

▸ $198,420

▸ $207,680
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
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sarahlouhiggsarahlouhigg
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4 years ago
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Begonia Author
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4 years ago
I appreciate what you did here, answered it correctly Smiling Face with Open Mouth
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