Jonas Inc. is trying to decide whether to lease or purchase a piece of equipment...
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| Jonas Inc. is trying to decide whether to lease or purchase a piece of equipment needed for the next ten years. The equipment would cost $49,000 to purchase, and maintenance costs would be $5,600 per year. After ten years, Jonas estimates it could sell the equipment for $27,000. If Jonas leases the equipment, it would pay $20,000 each year, which would include all maintenance costs. Refer the Table 2 and Table 4. |
| If the hurdle rate for Jonas is 12%, Jonas should (Round your PV factors to 4 decimal places. Do not round intermediate calculations. Round your final answer to the nearest hundred.) |
| lease the equipment, as net present value of cost is about $37,400 less. | |
| buy the equipment, as net present value of cost is about $41,100 less. | |
| buy the equipment, as net present value of cost is about $49,000 less. | |
| lease the equipment, as net present value of cost is about $41,100 less. |
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