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Your landscaping company can lease a truck for $8,700 a year (paid at year-end) for 7 years. It can instead buy the truck for $50,000. The truck will be valueless after 7 years. The lease payments are an annuity due, so that the first payment comes immediately.

a) What is the present value of the lease payments, If the interest rate your company can earn on its funds is 8%.

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  • Category:- Basic Finance
  • Reference No.:- M946845

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