Answer:
It can pay up to $ 689.012 annual maintenance cost for the van at the MARR of 20%
Explanation:
Present value of the lease:
[tex]C \times \frac{1-(1+r)^{-time} }{rate}(1+r) = PV\\[/tex]
C 3,000.00
time 3 years
rate 0.2
[tex]3000 \times \frac{1-(1+0.2)^{-3} }{0.2}(+.20) = PV\\[/tex]
PV $7,583.3333
Now, present value of the van:
7,000 - salvage value + maintenance cost
[tex]\frac{Salvage}{(1 + rate)^{time} } = PV[/tex]
Salvage: 1,500.00
time 3 years
rate 0.20000
[tex]\frac{1500}{(1 + 0.2)^{3} } = PV[/tex]
PV 868.0556
7,000 - 868.06 = 6.131,94
the maximum maintenance cost should match the lease:
lease Present worth 7,583.3333
purhcase Present worth (6.131,94)
PV of maintenance: 1,451.39
We know calculate the quota which matches this PV:
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV 1,451
time 3
rate 0.2
[tex]1451.39 \div \frac{1-(1+0.2)^{-3} }{0.2} = C\\[/tex]
C $ 689.012
