Use the Information for the Question(s) Below

question 32

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

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Definitions:

Pregnant

The state of carrying a developing fetus within the uterus.

Young Women

Females in their late adolescence to early adulthood, often characterized by significant physical, psychological, and social development.

Postconventional Level

Kohlberg’s highest level of moral development, in which moral reasoning involves weighing moral alternatives; “right” is whatever furthers basic human rights.

Ethically Demanding

Refers to situations or decisions that require a high level of ethical consideration and moral judgement.