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Matthew, an office administrator, is evaluating the following quotation that he received for the purchase of a printer for his office:
Lease Option: Make payments of $90 at the beginning of every month for 5 years. At the end of 5 years, make the final payment of $1,250.
Purchase Option: Make a payment of $5,300 immediately.
a. What is the present value of the lease option if money is worth 6.9% compounded semi-annually?
Round to the nearest cent
b. Which option would be economically better?
(click to select)Purchase OptionLease Option
c. What is the present value of the lease option if money is worth 9% compounded semi-annually?
Round to the nearest cent
d. Which option would be economically better?
(click to select)Purchase OptionLease Option
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