Question: A school does not know whether to rent or buy a bus to transport the students. If they rent it, they must make a uniform
A school does not know whether to rent or buy a bus to transport the students. If they rent it, they must make a uniform payment in advance; In addition, the contract specifies that the school will cover minor maintenance, which amounts to $120,000 per year, payable at the end of each year. If purchased, the bus will cost $500,000 and all maintenance, which will be paid for by the school, will amount to approximately $180,000 per year. With the purchase you will be able to depreciate the vehicle straight line and it is estimated that it will not have a salvage value at the end of its useful life of 10 years. If the school pays taxes (ISR) at a rate of 45%, its MARR is 10% and its planning horizon is 10 years, determine the uniform payment that it will have to make in advance to the lessor of the vehicle, so that the alternatives of rent and purchase are indifferent.
*Please show procedure in Excel*
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