Brianna was offered two options for a car she was purchasing:

• Lease option: Pay lease amounts of $400 at the beginning of every month for 6 years. At the the end of 6 years, purchase the car for $13,500.

• Buy option: Purchase the car immediately for $25,000.

The money is worth 7.40% compounded monthly.

a. What is the Discounted Cash Flow (DCF) for the lease option?

b. Which is the better option?