4.1 Your company is considering either buying or leasing a $120,000 piece of equipment for the next 10 years. The company plans to use the equipment indefinitely. The annual lease payments of $15,000 begin today. The lease includes an option for your company to buy the equipment for $25,000 at the end of the leasing period (i.e., 10 years). Assume that, if the company decides to lease, the company will exercise the option to buy the equipment at the end of the 10-year lease. Should your company accept the lease offer if the appropriate discount rate is eight percent per year?
Paper#5488 | Written in 18-Jul-2015Price : $25