Deutsche Transport can lease a truck for four years at a cost of 30,000 annually. It...

 

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Deutsche Transport can lease a truck for four years at a cost of €30,000 annually. It can instead buy a truck at a cost of €80,000, with annual maintenance expenses of €10,000. The truck will be sold at the end of four years for €20,000. Ignore taxes. a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%? (Do not round intermediate calculations. Enter your answer in Euro. Round your answer to the nearest whole number.) Equivalent annual cost b. Which is the better option: leasing or buying? Better option Deutsche Transport can lease a truck for four years at a cost of €30,000 annually. It can instead buy a truck at a cost of €80,000, with annual maintenance expenses of €10,000. The truck will be sold at the end of four years for €20,000. Ignore taxes. a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%? (Do not round intermediate calculations. Enter your answer in Euro. Round your answer to the nearest whole number.) Equivalent annual cost b. Which is the better option: leasing or buying? Better option

Answer rating: 100% (QA)

a The equivalent annual cost is computed as follows Initial co... View the full answer