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:

Temporal Lobes

Regions of the cerebral cortex located beneath the temples, involved in processing auditory information, memory storage, and managing emotional responses.

Senile Plaques

Protein deposits found in the brains of people with Alzheimer's disease, characterized by clusters of beta-amyloid protein that disrupt cell function.

Neurofibrillary Tangles

Twisted protein fibers found within the brain's cells that are one of the hallmark physical characteristics of Alzheimer's disease.

Beta-Amyloid Protein

A small molecule that forms sphere-shaped deposits called senile plaques, linked to aging and to Alzheimer’s disease.