How would the inclusion of a purchase option affect value

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In the leasing discussion, James informs Nick that the contract could include a purchase option for the equipment at the end of the lease. Hendrix Leasing offers three purchase options:

a. An option to purchase the equipment at the fair market value.
b. An option to purchase the equipment at a fixed price. The price will be negotiated before the lease is signed.
c. An option to purchase the equipment at a price of $275,000.

Problem 1: How would the inclusion of a purchase option affect the value of the lease?

Reference no: EM132943205

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