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Acme co is considering two options for acquiring a new

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ACME Co. is considering two options for acquiring a new company car. Details on the two options are:

Option 1. Lease the car for 4 years at an annual payment of $14,000; an additional $24,000 payment would be required at the end of the lease. The interest rate on this option is11%.

Option 2. Purchase the car on a 4 year note at an annual payment of $18,000. The interest rate on this option is11%.

Which option should ACME select? Show supporting computations.

Reference no: EM13481650

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