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What is the npv associated with the purchase

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Reference no: EM132481839

A bank can purchase an ATM (automated teller machine) for $55,000 that has an estimated life of 7 years. Maintenance over that period will be $1,750 annually. Alternatively, the bank can lease the ATM for $11,800 per year, with no additional maintenance fees. The discount rate is 7% 

(a) What is the NPV associated with the purchase?

(b) What is the NPV associated with the lease?

(c) What is the Equivalent Annual Cost associated with the purchase?

(d) Which option would you recommend?

Reference no: EM132481839

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