Our company decided to buy a new machine for 10,000€. Which of the following financing options would be best for the company?
a) Pay in cash from a fixed-term deposit the company has (which pays the company a 5% interest rate)
b) The lease company offers us a 3 year contract with a 4% nominal interest rate and an effective interest rate of 4.5%
c) The bank offers us a loan with a 3% nominal interest rate and an effective interest rate of 5.5%

Question

Our company decided to buy a new machine for 10,000€. Which of the following financing options would be best for the company? 
 a) Pay in cash from a fixed-term deposit the company has (which pays the company a 5% interest rate) 
 b) The lease company offers us a 3 year contract with a 4% nominal interest rate and an effective interest rate of 4.5% 
 c) The bank offers us a loan with a 3% nominal interest rate and an effective interest rate of 5.5%

Accepted Answer

Accept the lease option as it is the one with the lowest effective interest rate

Answer

I do not know the answer

Answer

Pay in cash as the company has available cash in the deposit and there will be no need for interest payments

Answer

None of the options provide enough information for a decision

Answer

Accept the loan from the bank as it is the option with the lowest nominal interest rate

Crowdly

Our company decided to buy a new machine for 10,000€. Which of the following fin...

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