You need a new car and are considering leasing versus buying.

Lease Option: You could lease the car for 5 years starting today for $7,000 per year with the first payment being due at the end of year 1.

Purchase Option: You could purchase the vehicle today for $35,000 and resell it at the end of 5 years for $4,000.

If the cost of capital is 6%, what option would you select and why?

Group of answer choices

buy the car and save $599.29 in equivalent annual cost.

lease the car and save $599.29 in equivalent annual cost.

either option is acceptable because they both have a cost of $35,000

buy the car because it effectively only costs $31,000