Foster Incorporated is trying to decide whether to lease or purchase a piece of equipment needed for the next years. The equipment would cost $ to purchase, and maintenance costs would be $ per year. After years, Foster estimates it could sell the equipment for $ If Fc leases the equipment, it would pay $ each year, which would include all maintenance costs. If Foster's cost of capital is Foster should: Future Value of $ Present Value of $ Future Value Annuity of $ Present Value Annuity of $
Note: Use the appropriate factors from the PV tables.
Multiple Choice
lease the equipment, as the net present value of the cost is about $ less.
buy the equipment, as the net present value of the cost is about $ less.
lease the equipment, as the net present value of the cost is about $ less.
buy the equipment, as the net present value of the cost is about $ less.
