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    Considering a lease versus buying

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    Considering two additional mutually exclusive projects. The cash flows associated with these projects are as follows:

    YEAR PROJECT A PROJECT B
    0 $100,000 $100,000
    1 32,000 0
    2 32,000 0
    3 32,000 0
    4 32,000 0
    5 32,000 $200,000

    The required rate of return on these projects is 11 percent.

    1. What has caused the ranking conflict?
    2. Which project should be accepted? Why?

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    https://brainmass.com/business/capital-budgeting/considering-lease-versus-buying-419559

    Solution Summary

    This solution provides assistance in determining whether one should lease or buy.

    $2.19

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