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A small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased the "shell" with cost $155.000 and is expected to have a $60,000 salvage value

A small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased the "shell" with cost $155.000 and is expected to have a $60,000 salvage value after 6 years. Alternatively, the company can lease a clamshell for only $20,000 per year, but the lease payment will have to be made at the beginning of each year if the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yleld revenues of $16,000 per year. If the company's MARR is 18% per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options The future worth when purchased is $ The future worth when leased is $ The clamshell should be (Click to select) (Click to slot) purchased leased

vA small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased the

Jun 10 2021 View more View Less

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