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fgiga [73]
3 years ago
9

A company is considering whether to purchase or lease a piece of equipment for an upcoming project. The cost to purchase is $10,

000 plus $100 per day to operate or $500 per day to lease (including operating costs). If the company anticipates using the equipment for a total of 20 days, they will be indifferent as to whether or lease or purchase it.a. Trueb. False
Business
1 answer:
marta [7]3 years ago
6 0

Answer:

If the company is going to use the machine for 20 days, it is cheaper to lease it.

Explanation:

Giving the following information:

The cost to purchase is $10,000 plus $100 per day to operate or $500 per day to lease

<u>First, we need to structure the total cost formula for each option:</u>

Purchase= 10,000 + 100x

x= number of days

Lease= 500x

x= number of days

<u>Now, we can determine the total cost for 20 days:</u>

Purchase= 10,000 + 100*20= $12,000

Lease= 500*20= $10,000

If the company is going to use the machine for 20 days, it is cheaper to lease it.

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