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Carolina will have to replace few trucks in its fleet at the end of this year. Carolina can lease trucks or buy them today with cash. Lease will require monthly lease payments of $12,500 at the beginning of each month for the next 5 years. Alternatively, Carolina can buy trucks today for $650,000 with available cash. If the opportunity cost of funds is 6.2% per year, should Carolina buy or lease? (Ignore taxes, service costs, down payment, fees on the lease etc.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92400211

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