Foster Incorporated is trying to decide whether to lease or purchase a piece of equipment needed for the next $10$ years. The equipment would cost $$50,000$ to purchase, and maintenance costs would be $$5,200$ per year. After $10$ years, Foster estimates it could sell the equipment for $$22,000.$ If Foster leases the equipment, it would pay $$16,000$ each year, which would include all maintenance costs. If Foster$$s cost of capital is $12\%,$ Foster should: $($Future Value of $$1,$ Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity of $$1)$

Note: Use the appropriate factors from the PV tables.

Multiple Choice

buy the equipment, as the net present value of the cost is about $$50,000$ less.

buy the equipment, as the net present value of the cost is about $$18,100$ less.

lease the equipment, as the net present value of the cost is about $$18,100$ less.

lease the equipment, as the net present value of the cost is about $$14,400$ less.