AA Corp can lease a truck for four years at a cost of $25,000
annually. It can instead
buy a...
AA Corp can lease a truck for four years at a cost of $25,000
annually. It can instead
buy a truck at a cost of $60,000, with annual maintenance expenses of
$10,000. The truck
will be sold at the end of four years for $12,000. Ignore taxes.
a. What is the equivalent annual cost of buying and maintaining the truck
if the discount rate is 10%?
b. Which is the better option: leasing or buying?
Answers: 1
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