A firm is considering the installation of an automatic data processing unit to handle some of its accounting operations. Machine for that purpose may be purchased for P 2M or may be leased for P 800,000 for the first year and P 100,000 less every year until the end of the 4 th year. If money is worth 15%, which alternative is better and by how much?
A firm is considering the installation of an automatic data processing unit to handle some of its accounting operations. Machine for that purpose may be purchased for P 2M or may be leased for P 800,000 for the first year and P 100,000 less every year until the end of the 4 th year. If money is worth 15%, which alternative is better and by how much?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A firm is considering the installation of an automatic data processing unit to handle some of its accounting operations. Machine for that purpose may be purchased for P 2M or may be leased for P 800,000 for the first year and P 100,000 less every year until the end of the 4 th year. If money is worth 15%, which alternative is better and by how much?
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