The Gopal Expeller Co. can lease an oil expeller for hour years at a cost...
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The Gopal Expeller Co. can lease an oil expeller for hour years at a cost of $30,000 annually. It can instead buy an oil expeller at a cost of $80,000, with annual maintenance expenses of $10,000. The oil expeller will be sold at the end of four years for $20,000. Ignore taxes. a. What is the equivalent annual cost of buying and maintaining the oil expeller if the discount rate is 10%? b. Which is the better option: leasing or buying?
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