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A firm needs new copy machine. You can purchase a new one for $30000, or you...

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Finance

A firm needs new copy machine. You can purchase a new one for$30000, or you can lease one for three years for a monthly leasepayment of $800 (paid at the end of each month). You can borrowmoney at 5% APR with quarterly compounding. Do you prefer to leaseor buy the machine?

Answer & Explanation Solved by verified expert
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To decide whether to purchase or lease we need to compare themonthly lease payment with monthly loan payment for purchasing themachineover three years First we need to find monthly    See Answer
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A firm needs new copy machine. You can purchase a new one for$30000, or you can lease one for three years for a monthly leasepayment of $800 (paid at the end of each month). You can borrowmoney at 5% APR with quarterly compounding. Do you prefer to leaseor buy the machine?

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