aptitude

Question

a company is considering proposal of purchasing a machine either by making full payment of Rs 4000 otr by leasing it for 4 years

at an annnual rent of rs 1250 .which course of action is preferable ,if company can borrow maney at 14% per annum ?

a.leasing preferable

b.leasing not preferable

Answer 1

Leasing is preferable

Calculation of amount to be paid in case of leasing= 1250*(1+(14/100))^4=2111.2002 which is less than 4000 to be paid if bought. Hence, leasing is preferable. Answer is option A)

Comments

nice explanation.