Lease the car for 4 years at an annualpayment of 14000 an

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Reference no: EM13610972

ACME Co. is considering two options for acquiring a new companycar. Details on the two options are:

Option 1. Lease the car for 4 years at an annualpayment of $14,000; an additional $24,000 payment would be requiredat the end of the lease. The interest rate on this option is11%.

Option 2. Purchase the car on a 4 year note at anannual payment of $18,000. The interest rate on this option is11%.Which option should ACME select? Show supportingcomputations.

Reference no: EM13610972

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