Question

Suppose you are studying two hardware lease proposals. Option 1 costs $4,000, but requires that the entire amount be paid in advance. Option 2 costs $5,000, but the payments can be made $1,000 now and $1,000 per year for the next four-years. If you do an NPV analysis assuming a 14% discount rate, which proposal is less expensive? What happens if you use an 8% rate?



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  • CreatedSeptember 04, 2014
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