Marshall Boya needs a new plant for its new business line. The company has two options: lease the plant at a cost of $38,000 per year for 4 years or buy it for $88,000 with $18,000 yearly maintenance cost. If the company decides to buy the plant, it will be able to sell it for $28,000 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 16. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Which option is better for Marshall Boya?

• Buy

• Lease