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

---

Definitions:

U.S. Army

The United States Armed Forces division tasked with overseeing military activities on terrestrial terrain.

Natural Increase

The growth in a population resulting from the excess of births over deaths, excluding migration.

Old South

The term refers to the socio-economic and cultural landscape of the southern United States before the Civil War, characterized by plantation economies.

Internal Slave Trade

Refers to the trade of enslaved people within the borders of a country, notably within the United States before the Civil War, moving individuals primarily from the Upper South to the Deep South.