Question: A construction firm needs a new small loader. It can be leased from the dealer for $5,500 per year for three years. This annual fee

A construction firm needs a new small loader. It can be leased from the dealer for $5,500 per year for three years. This annual fee will include all maintenance. Or they can purchase the loader for $20,000. The firm expects it to have a salvage value of $7,000 after 7 years. The maintenance will be $500 the first year and then increase by $300 each year. The firm's interest rate is 12% per year. Compare the EUAC for leasing and buying the loader.

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