The Veterans Home Facility is in need of a new x$-$ray machine. A new machine costs $$1,500,000$ and has an annual maintenance cost of $$27,500.$ Its useful life is $10$ years and the clinic would finance the machine for its entire lifespan. Leasing the same x$-$ray machine would cost the clinic $$225,000$ per year including maintenance. Assume an interest rate of $8\mathrm{.}5\%.$In Excel, set up the problem, identify the knowns, and answer the following: What should the facility do$,$ lease or buy the new machine? What would the answer be if the interest rate was $5\mathrm{.}5\%?$ In addition, provide an interpretation.

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Lease vs Buy an XRay Machine Veterans Home Facility Knowns XRay Machine Cost 1500000 Annual Maintenance Cost 27500 Useful Life 10 years Lease Payment ... View the full answer