Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $3,900 (paid at the beginning of each month). Your firm can borrow at 6% APR with quarterly compounding.

a. Calculate the effective annual rate on your firm's borrowings.

a. The effective annual rate is ????%. (round to two decimals)

b. Calculate the effective monthly discount rate that you should use to evaluate the truck lease.

b. The effective monthly rate is ?????%. (round to three decimals)

c. What is the present value of the lease payments for the delivery truck?

c. The PV of the lease is ??????$. (round to full $)

d. Calculate the lease rate for which you would be indifferent between leasing and buying the truck.

d. The indifference lease rate is ?????$. (round to full $)

e. Should you lease or buy?

(Hint: Do not round intermediate results from a. to d.)

e. ???? (fill in "lease" or "buy")