A flower distribution company, Perennial Blossoms wishes to buy a truck to expand its business. It could either buy or lease the truck. If the company buys the truck for $80,000, it can run it with routine maintenance & repairs for 5 years and sell it for $20,000. It will have to finance the truck purchase by paying 6% financing for 5 years, compounded monthly, from Auto Finance. The amortization of the loan financing has to be paid at the end of each month.

Alternatively, the company can lease the truck with the lease payment due at the beginning of each month. Should the company buy or lease the truck? What other considerations should apply in the lease versus purchase decision of the company for the purchase of the truck? leasing amount 40000