Should StMartin Lease the Scanner or Borrow the Funds and Buy

question 25

Multiple Choice

Should St.Martin lease the scanner or borrow the funds and buy the scanner?

• A)Buy the scanner; the NPV of the decision = -$74,890.28.
• B)Buy the scanner; the NPV of the decision = -$1,749,890.28
• C)Lease the scanner; the NPV of the decision = $1,812,027.19
• D)Lease the scanner; the NPV of the decision = $692,559.51
• E)Buy the scanner,the NPV of the decision = -$104,027

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Definitions:

Bilateral Contract

A contract in which there is an exchange of promises: both parties assume an obligation.

Unilateral Contract

A contract in which only one party makes a promise or undertakes a performance to induce a second party to perform, without the second party similarly promising or performing.

Consideration

Something of value exchanged between parties within a contract, making the agreement legally binding.

Online Transactions

Financial or commercial activities conducted over the internet, including buying, selling, and the exchange of goods, services, and information.