Business, 20.02.2020 16:13 Hollywood0122
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding.
The effective annual rate on your firm's borrowings is closest to:
A) 6.00%
B) 6.24%
C) 6.17%
D) 6.14%
The monthly discount rate that you should use to evaluate the truck lease is closest to:
A) 0.487%
B) 0.512%
C) 0.498%
D) 0.500%
Answers: 2
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