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You need a particular piece of equipment for your production process. An​ equipment-leasing company has offered...

You need a particular piece of equipment for your production process. An​ equipment-leasing company has offered to lease the equipment to you for $ 10,000 per year if you sign a guaranteed 5​-year lease​ (the lease is paid at the end of each​ year). The company would also maintain the equipment for you as part of the lease.​ Alternatively, you could buy and maintain the equipment yourself. The cash flows from doing so are listed below​ (the equipment has an economic life of 5 ​years). If your discount rate is 7.1 %​, what should you​ do?

year 0 year 1 year 2 year 3 year 4 year 5
-39,200 -2,100 -2,100 -2,100 -2,100 -2,100

The net present value of the leasing alternative is ​$ nothing. ​(Round to the nearest​ dollar.)

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I HAVE ALSO EXPLAINED, HOW TO GET PV FACTORS FOR GIVEN %


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