Chapter 4 Capital Budgeting and Basic Investment Appraisal ...

The discount rate is 7% and the tax rate is 20%. Assume that you pay the price of the car up front, and the annual costs at the end of the year. The costs of leasing occur at the end of each period. (For example, if you purchase Car B, you pay $18,000 in year 0 and $1,000 in year 1, year 2, etc. If you lease car A, you pay $4,650 in year1, year 2, etc.) Note: consider all relevant cash flows ... ................
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