You have to buy a new copier. The cost of the copier is $1,900, plus $415 per year in maintenance costs. The copier will last for five years. Alternatively, a local company offers to lease the copier to you and do the maintenance as well. If your discount rate is 6.5%, what is the most you would be willing to pay per year to lease the copier (your first lease payment is due in one year)? (Select the best choice below.) O A. The most you would be willing to pay per year to lease the copier is $415. O B. The most you would be willing to pay per year to lease the copier is $3,624.61. O C. The most you would be willing to pay per year to lease the copier is $872.21. O D. The most you would be willing to pay per year to lease the copier is $1,900.
You have to buy a new copier. The cost of the copier is $1,900, plus $415 per year in maintenance costs. The copier will last for five years. Alternatively, a local company offers to lease the copier to you and do the maintenance as well. If your discount rate is 6.5%, what is the most you would be willing to pay per year to lease the copier (your first lease payment is due in one year)? (Select the best choice below.) O A. The most you would be willing to pay per year to lease the copier is $415. O B. The most you would be willing to pay per year to lease the copier is $3,624.61. O C. The most you would be willing to pay per year to lease the copier is $872.21. O D. The most you would be willing to pay per year to lease the copier is $1,900.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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