Consider a five-year lease for a $400,000 bottling machine, with a residual market value of

$150,000 at the end of the five years. If the risk-free interest rate is 6% APR with monthly compounding, compute the monthly lease payment in a perfect market for the following leases:

a. A fair market value lease

b. A $1.00 out lease

c. A fixed price lease with an $80,000 final price Appendix