Your landscaping company can lease a truck for $7,700 a year ( paid at year-end) for 7 years. It can instead buy the truck for $41,000. The truck will be valueless after 7 years. The intetest rate your company can earn on its funds is 8%.

a) What is the present value of the cost of leasing?

b) Is it cheaper to buy or lease?

c) What is the present value of the cost of leasing if the payment are an annuity dur, so the first payment comes immediately?

d) Is it cheaper to buy or lease?