Kiddy Toy Corporation needs to acquire the use of a machine to be used in its manufacturing process. The machine needed is manufactured by Lollie Corporation. The machine can be used for 10 years and then sold for $27,000 at the end of its useful life. Lollie has presented Kiddy with the following options:
Buy machine. The machine could be purchased for $177,000 in cash. All insurance costs, which approximate $22,000 per year, would be paid by Kiddy.
