1). a) A company has two alternatives for satisfying its daily travel requirement of its employees for the nextfive yearsAlternative 1: renting a vehicle at a cost of 1000000 per yearsAlternative 2: buying a vehicle for 500000 with an operating and maintenance cost of * 350000 per year.The salvage value of the vehicle after five year is 100000.Select the best alternative based on the present worth method of comparison using the interest rate of 20%compounded annually.b) Define depreciation, book value and financial ratio.
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If you're concerned about the monthly costs, a lease eases the burden a bit. Generally, the monthly payment is considerably less than it would be for a car loan. Some people even opt for a more luxurious car than they otherwise could afford.
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