AlNawras is a marketing company operating in Ramallah. The company policy is to give every new employee a new car every 5 years. Each car cost $40,000. The company has 2 choices, either Purchasing a new car or lease it. If the company decides to purchase the car, they have to pay $40000 for the new car, another $1000 for license- paid every year and $500 maintenance cost paid every year start from next year. The company expects to sell the car for $15000 on the 5 th year. Choice B is to rent the car from AlSafa company. ALsafa demands only apayment of $10,000 yearly, starts from next year - for 5 years.

If the borrowing cost is 10% Advice the company which choice is better