(Answered) Emma runs a small factory that needs a vacuum oven for

Finance

Emma runs a small factory that needs a vacuum oven for brazing small fittings. She can purchase the model she needs for $180,000 up front, or she can lease it for $4,200 per month. She can borrow at 7% APR, compounded monthly. Assuming that the oven will be used for 5 years, should she purchase the oven or should she lease it?

a. buy, since PV of the lease is $32,108 more than the cost of the oven

b. lease, since the PV of the lease is $2,212 less than the cost of the oven

c. lease, since the PV of the lease is $12,224 less than the cost of the oven

d. lease, since the PV of the lease is $8,642 less than the cost of the oven

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