What is the school annual cost of capital

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Your school is improving its infrastructure by investing $2.5 million in new computer servers with an anticipated useful life of three years. The school can borrow money at an APR of 3.5% with quarterly compounding from its bank to purchase the equipment. Alternatively, the computer company has offered you the opportunity spread the cost of the servers over the three years with monthly payments of $83,333.33

What is the school's annual cost of capital?

Reference no: EM131881880

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