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:

Central Executive

A component of working memory model that oversees and regulates the flow of information from and to its subsidiary systems.

Baddeley

A reference to Alan Baddeley, a psychologist best known for his work on the model of working memory.

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it within working memory or to store it in short-term memory.

Phone Number

A sequence of digits assigned to a telephone line for the purpose of making and receiving calls.