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?
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