Purchase Considerations Borrow $1.6 million at 10 percent on declining balance Depreciate stratight line over five...

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Purchase Considerations Borrow $1.6 million at 10 percent on declining balance Depreciate stratight line over five years Trade-in value of $130,000 at end of useful life Maintenance expense of $12,000 per year Lease Considerations Lease payments of $26,000 per month for 60 months (Includes Maintenance) Revenues and labor and supply expenses are the same for both decisions and are not included in the analysis 1. Using a present value table, compute the purchase versus lease amounts (Show your work) Purchase Considerations Borrow $1.6 million at 10 percent on declining balance Depreciate stratight line over five years Trade-in value of $130,000 at end of useful life Maintenance expense of $12,000 per year Lease Considerations Lease payments of $26,000 per month for 60 months (Includes Maintenance) Revenues and labor and supply expenses are the same for both decisions and are not included in the analysis 1. Using a present value table, compute the purchase versus lease amounts (Show your work)

Answer rating: 100% (QA)

To compare the purchase and lease amounts we need to calculate the present value of each option The ... View the full answer