Use the Information for the Question(s) Below

question 3

Multiple Choice

Use the information for the question(s) below.
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4,000 (paid at the end of each month) . Your firm can borrow at 6% APR with quarterly compounding.
-The monthly discount rate that you should use to evaluate the truck lease is closest to:

• A) 0.487%
• B) 0.512%
• C) 0.498%
• D) 0.500%

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Definitions:

Neuroticism

A behavioral quality defined by irregular moods, worry, and lack of emotional steadiness.

Conscientiousness

A personality trait characterized by organization, thoroughness, reliability, and a strong sense of duty.

Variance

A statistical measure that represents the spread or dispersion of a set of data points, indicating how much the data vary from the average value.

Big Five

A theory of personality recognizing five broad dimensions that represent the most significant variations in human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.