Your firm is considering leasing a $50,000 copier. The copier has an estimated economic life of eight years. Suppose the appropriate discount rate is 8.7% APR with monthly compounding. Classify each lease below as a capital lease or operating lease, and explain why:

a. A four-year fair market value lease with payments of $1,155 per month.

b. A six-year fair market value lease with payments of $790 per month.

c. A five-year fair market value lease with payments of $920 per month.

d. A five-year fair market value lease with payments of $1,005 per month and an option to cancel after three years with a$8,800 cancellation penalty.