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QUESTION
A company needs an additional machine that will be used for the next 6 years, at which time the machine will be obsolete and have zero salvage value....
A company needs an additional machine that will be used for the next 6 years, at which time the machine will be obsolete and have zero salvage value. The company has two options available: purchase the asset for the list price of $375,000 cash or lease the asset, requiring 6 annual lease payments of $72,000 with the first payment due immediately. The lease payments include 4.0% interest. Excluding depreciation considerations, the best alternative is to
Purchase/Lease:
