Suppose the purchase price of the forklift is ($20,000,) its residual value in four years is certain

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Suppose the purchase price of the forklift is $$20,000,$ its residual value in four years is certain to be $$6000,$ and there is no risk that the lessee will default on the lease. If the risk-free interest rate is a 6% APR with monthly compounding, what would be the monthly lease payment for a four-year lease in a perfect capital market?

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PLAN Because all cash flows are risk free we can discount them u...View the full answer

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