4) A car can be purchased for $33,900 today and an additional payment of $4,000 in 3 years from today. It would then be sold (salvage or scrap value) after 8 years for $5,000. Alternatively, it could be leased for 8 years with $427.00 end of the monthly payments. Using DCF and a cost of money of 6% compounded annually, which option is better or cheaper? (4 marks-16.1)

a. What is the cost of buying in todays dollars (DCF)

b. What is the cost of leasing in todays dollars (DCF)