10-8

A firm can lease a truck for 6 years at a cost of $44,000 annually. It can instead buy a truck at a cost of $94,000, with annual maintenance expenses of $24,000. The truck will be sold at the end of 6 years for $34,000. a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 14\%? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. Which is the better option? Lease Buy