Lease Vs Buy

Your landscaping company can lease a truck for $7,050.00 a year for 7 years. It can instead buy the truck for $28,662.00. The truck will be valueless after 7 years.

a.	What is the present value of the lease payments, If the interest rate your company can earn on its funds is 12.50%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

b.

Is it cheaper to buy or lease?

	buy
	lease