Question
. Boeheim County is considering two lease options for new garbage trucks. Option A is a five-year lease that requires a $20,000 down-payment at the
. Boeheim County is considering two lease options for new garbage trucks. Option A is a five-year lease that requires a $20,000 down-payment at the beginning and monthly lease payments of $3,000. The trucks are expected to use $1,000 per month in gas. Option B is a three-year lease on hybrid trucks, with a $50,000 down-payment and $2,500 per month lease payments. The hybrids use only $500 per month in gas. Assume the cost of capital is 9% per year and that all payments come at the end of each month. Based on the finances, which lease is better?
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