Question: Imagine an asset your rm is interested in using. You have two options to acquire/use that asset: You can buy it for $200,000 today or

Imagine an asset your ﬁrm is interested in using. You have two options to acquire/use that asset: You can buy it for $200,000 today or you can lease it for $3,980 per month (paid at the end of each month) for ﬁve years.

If your ﬁrm's discount rate is 9% per year, which do you choose and how much do you save in today's dollar terms?

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