Marshall Boya needs a new plant for its new business line. The company has two options: lease the plant at a cost of $32,000 per year for 4 years or buy it for $82,000 with $12,000 yearly maintanence cost. If the company decides to buy the plant, it will be able to sell it for $22,000 at the end of 4 years.

a. Calculate the equivalent annual cost of buying and maintaining the plant for 4 years. Assume that the discount rate is 10. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Which option is better for Marshall Boya?

multiple choice

• Lease

• Buy