practice question help

I'm a little confused by the answer of this question, so I will ask for help from the pros

You are trying to decide whether to purchase or lease a network printer. The printer costs $1,200 to purchase and typically needs to be replaced every four years. A vendor has offered to lease your company a printer for an annual cost of $540, which includes repair costs, for a contract period of 5 years. The failure of the printer will not significantly affect productivity or require significant support from your technical staff.

Which of the following statements is true regarding the total cost of leasing the printer versus purchasing the printer and using it over a five year period?

A) It will cost the company $300 more to lease than to buy the printer

There is no cost difference between leasing and buying

I chose A, but the answer is B

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Comments

TechGuru80

I am guessing they want you to assume $300 in labor and repair costs.

The math obviously works out to be $300 less to purchase versus leasing for the printer itself, but that is just for the equipment. To be honest, it's a pretty poor question but they are trying to catch you not including labor and repair costs in your calculation.

MitM

TechGuru80 wrote: »

I am guessing they want you to assume $300 in labor and repair costs.

The math obviously works out to be $300 less to purchase versus leasing for the printer itself, but that is just for the equipment. To be honest, it's a pretty poor question but they are trying to catch you not including labor and repair costs in your calculation.

They are saying the SLE is $1200 and the ARO is .25, so the ALE is $300

So $1200 + $1500 = 2700.

I agree it's a poorly worded question

ansionnachcliste

Terrible question, just move on from it and expect that something like this won't show up on the exam.

What question bank is this from?

MitM

Good advice. This is from Boson.

TechGuru80

MitM wrote: »

They are saying the SLE is $1200 and the ARO is .25, so the ALE is $300

So $1200 + $1500 = 2700.

I agree it's a poorly worded question

They said it’s for SLE in the explanation? Wow that’s even worse...honestly they worded it as a TCO question...and I have literally never seen an SLE not specifically asking for the value. I would still even argue the answer is not correct because the math would actually suggest the probability of two printers failing is actually less than 25% within that period but obviously they aren’t going to start introducing complicated calculations haha.