Question: 3 A small business is trying to decide whether it should purchase or lease a delivery truck. The cost to purchase adellery truck is $100,000

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3 A small business is trying to decide whether it should purchase

A small business is trying to decide whether it should purchase or lease a delivery truck. The cost to purchase adellery truck is $100,000 it would be depreciated as 5 year MACRS property and would cost $6.000 per year to operate and maintain. The com plans to keep it for 7 years at which point it would have a salvace value at $3,000. Alternatively, the small business could lease delivery truck for $20,000 per year with payments due at the beginning of each year. Maintenance included in the cost of the lease but operating costs would be $4,000 per year. The delivery truck would be leated for years. Assuming an after tax MARR of 85 and tax rate of 30%, compute the PW of each alternative and determine whether the small business should purchase or lease the delivery truck Click here to access the TVM Factor Table calculator Click here to access the MACRS-GOS Property Classes Click here to access the MACRS GOS percentages page Click here to access the MACRS-GDS percentages for 27.5-year residential rental property PWpurchase) 5 Pwllease) - 5 s and then round your final answers to a whole number. The tolerance is t2 There is not enough intormation to determine Lente use the delivery truck Purchase e Textbook and Media

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