You Need A Particular Piece Of Equipment For Your Production Process

You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease you the equipment for $10,000 per year if you sign a guaranteed five-year lease. The company would also maintain the equipment for you as part of the lease. Alternatively, you could buy and maintain the equipment yourself. The cash flows (in thousands) from doing so are listed below (the equipment has an economic life of five years). If your discount rate is 7%, what should you do?0 1 2 3 4 5-40- 2 – 2 – 2 – 2 – 2

Originally posted 2018-07-07 18:53:17. Republished by Blog Post Promoter

You need a particular piece of equipment for your production process

Question
You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease you the equipment for $10,000 per year if you sign a guaranteed five-year lease. The company would also maintain the equipment for you as part of the lease. Alternatively, you could buy and maintain the equipment yourself. The cash flows (in thousands) from doing so are listed below (the equipment has an economic life of five years). If your discount rate is 7%, what should you do?

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