Your landscaping company can lease a truck for $8,300 a year for 6 years. It can instead buy the truck for $40,000. The truck will be valueless after 6 years.

a.	What is the present value of the lease payments, if the opportunity cost of capital is 7%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

b.

Is it cheaper to buy or lease?

	Lease
	Buy