Should you purchase the delivery truck or lease

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Reference no: EM13847200

Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding.

Should you purchase the delivery truck or lease it? Why?

Reference no: EM13847200

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