Use the Information for the Question(s) Below

question 23

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.
-The monthly lease payments for a four year lease of the Bulldozer are closest to ________.

• A) $1,870
• B) $1,825
• C) $1,750
• D) $2,115

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Definitions:

Temperature Range

The variation between the minimum and maximum temperatures over a period of time or in a specific environment.

Precipitation

Any form of water - liquid or solid - that falls from clouds and reaches the ground, including rain, snow, sleet, and hail.

Savanna

A grassland ecosystem characterized by the presence of scattered trees, maintaining an open canopy, found in tropical and subtropical regions.

Earth's Biomes

Large ecological areas on the planet's surface, defined by distinctive climate, soil, and vegetation types, such as deserts, forests, and tundra.