A contractor is considering whether to buy or leasea new
Chapter , Problem 7-74(choose chapter or problem)
A contractor is considering whether to buy or leasea new machine for her layout site work. Buyinga new machine will cost $12,000 with a salvagevalue of $1200 after the machines useful life of8 years. On the other hand, leasing requires anannual lease payment of $3000. Assuming that theMARR is 15% and on the basis of an internal rateof return analysis, which alternative should the con-tractor be advised to accept? The cash flows are asfollows:Year (n)Alt.A(buy) Alt.B(lease)0$12,000$3000130002300033000430005300063000730008+12000
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