ciera51
ciera51
09.09.2019 • 
Business

Afirm is considering either leasing or buying a microcomputer system. if purchased, the initial cost will be $250,000; annual operating and maintenance cost will be $75,000 per year. based on a 6-year planning horizon, it is anticipated the computer will have a salvage value of $15,000 at that time. if the computer is leased, the firm will owe $50,000 at the beginning of each year. in addition, annual operating and maintenance costs in excess of the annual lease payment will be $80,000 per year. • you are to draw the cash flow diagrams for the buy option and one for the lease option. • state any assumptions (if any) clearly.

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