Your firm is purchasing a new telephone system that will last for five years. You can purchase the system for an upfront cost of $300,000, or you can lease the system from the manufacturer for $6,000 paid at the end of each month. The lease price is offered for a 60-month lease with no early termination—you cannot end the lease early. Your firm can borrow at an interest rate of 7% APR with monthly compounding. Should you purchase the system outright or pay $6,000 per month?

you should purchase the system outright because it would be cheaper than the lease.

Explanation:

because purchase it at $300,000 while lease for 60 months would be 60 X $ 6 000= $360,000 without the 7% interest rate. With the interest rate he amount would still be higher.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.