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:

Critical Thinking

The skill of logically breaking down ideas, identifying fallacies, and understanding arguments.

Resistance

Opposition or pushback against forces or ideas, often manifesting in social, political, or personal contexts.

Art of Reasoning

The skillful use of thinking and logic to form conclusions, solve problems, and engage in persuasive discourse.

Thomas Jefferson

An American Founding Father, the principal author of the Declaration of Independence, and the third President of the United States.