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ACME Co is considering two options for acquiring a new company car

ACME Co. is considering two options for acquiring a new company car. Details on the two options are:

Option 1. Lease the car for 4 years at an annual payment of $14,000; an additional $24,000 payment would be require date the end of the lease. The interest rate on this option is11%.

Option 2. Purchase the car on a 4 year note at an annual payment of $18,000. The interest rate on this option is11%.

Which option should ACME select? Show supporting computations.

May 01 2018 View more View Less

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