Blue Excavating Inc. is purchasing a bulldozer. The equipment has a price of $95,100. The...
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Blue Excavating Inc. is purchasing a bulldozer. The equipment has a price of $95,100. The manufacturer has offered a payment plan that would allow Blue to make 11 equal annual payments of $13,321.27, with the first payment due one year after the purchase.
Blue could borrow $95,100 from its bank to finance the purchase at an annual rate of 7%. Should Blue borrow from the bank or use the manufacturers payment plan to pay for the equipment? Manufacturer's rate?
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