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A firm can lease a truck for 4 years at a cost of $36,000 annually. It...

A firm can lease a truck for 4 years at a cost of $36,000 annually. It can instead buy a truck at a cost of $86,000, with annual maintenance expenses of $16,000. The truck will be sold at the end of 4 years for $26,000.

a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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Expert Solution

WE CAN ALSO SOLVE USING OCF METHOD, BUT THIS IS STILL A SIMPLE METHOD. THANK YOU

jeff jeffy answered 1 year ago
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