A firm can lease a truck for 4 years at a cost of $30,000 annually. It...
A firm can lease a truck for 4 years at a cost of $30,000 annually. It can instead buy a truck at a cost of $80,000, with annual maintenance expenses of $10,000. The truck will be sold at the end of 4 years for $20,000.
a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%?
b. Which is the better option: leasing or buying?
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A firm can lease a truck for 4 years at a cost of $30,000
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