In: Finance
Deutsche Transport can lease a truck for four years at a cost of
€30,000 annually. It can instead buy a truck at a cost of €80,000,
with annual maintenance expenses of €10,000. The truck will be sold
at the end of four years for €20,000. Ignore taxes.
a. What is the equivalent annual cost of buying
and maintaining the truck if the discount rate is 10%? (Do
not round intermediate calculations. Enter your answer in Euro.
Round your answer to the nearest whole number.)
b. Which is the better option: leasing or
buying?