Question: Problem Your firm is purchasing a new telephone system, which will last for four years. You can purchase the system for an upfront cost of

Problem
Your firm is purchasing a new telephone system, which will last for four years. You can purchase
the system for an upfront cost of $150,000, or you can lease the system from the manufacturer for
$4000 paid at the end of each month. ?3 Your firm can borrow at an interest rate of 5% APR with
semiannual compounding. Should you purchase the system outright or pay $4000 per month?
Problem Your firm is purchasing a new telephone system, which will

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