Question: Select the best option to acquire construction equipments: Red Bird Construction company is considering three different acquisition methods for obtaining pickup trucks. Interest rate: 8%

 Select the best option to acquire construction equipments: Red Bird Construction

Select the best option to acquire construction equipments: Red Bird Construction company is considering three different acquisition methods for obtaining pickup trucks. Interest rate: 8% 1) Option A: Immediate cash purchase the trucks for $16,800 each, and after 4 years sell each truck for an estimated $5,000. 2) Option B: To lease the trucks for 4 years for $4,100 per year paid in advance at the beginning of each year. The contractor pays all operating and maintenance costs for the trucks, and the leasing company retains the ownership 3) Option C: To purchase the trucks using a time payment plan requiring an immediate down payment of $4,000 and $3,370 per year at the end of each year for 4 years. Assume the trucks will be sold after 4 years for $5,000 each. Dept. of Technology, ISU

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