Use the Information for the Question(s)below

question 15

Multiple Choice

Use the information for the question(s) below.
Suppose the purchase price of a bulldozer is $90,000,its residual value in four years is certain to be $15,000,and there is no risk that the lessee will default on the lease.Assume that capital markets are perfect and the risk-free interest rate is 6% APR with monthly compounding.
-Suppose that instead of leasing the bulldozer,the company is considering purchasing a bulldozer outright by borrowing the purchase price using a four-year annuity loan.The monthly loan payments for a four-year loan to purchase the bulldozer are closest to:

• A)$2115.
• B)$1825.
• C)$1870.
• D)$1750.

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Definitions:

Theories of Consumption

Various perspectives that attempt to explain patterns, motives, and impacts of consumer behavior in society.

Theories of Globalization

Diverse perspectives that analyze the processes, causes, and consequences of global integration and interconnections across economic, political, and cultural spheres.

Social Construction

The theory that much of the social world is created through collective human agreement and is culturally and historically specific rather than inherent.

Colonialism

Refers to the practice of acquiring full or partial political control over another country, occupying it with settlers, and exploiting it economically.