small company has to lease a truck. The company can either pay the lease costs up-front for three years, or it can pay it in annual payments at the start of each year. If the up-front cost is 24,000 for 3 years, or the alternative is an annual cost of 8000 (payable at the beginning of each year), determine whether it is best to pay up-front or by yearly payments, over a 3-year period. You will need to take into account that the inflation rate is 5% per year and the annual payment scheme will be subject to inflation rate rises. Also the bank interest rate is 3%. To do this you will need to determine the Net Present Value (NPV) costs of each method of payment. What would happen if the bank interest rate increased to 9%? Would this affect your decision? The formula for NPV is: X (1r)t Where X is the amount to be adjusted, r is the interest rate as a fraction and t is the time period.