Your landscaping company can lease a truck for $8,700 a year (paid at year-end) for 7 years. It can instead buy the truck for $46,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%.

a.	What is the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value of lease $

b.

Is it cheaper to buy or lease?

	Buy
	Lease

c-1.	What if the lease payments are an annuity due, so the first payment comes immediately? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value of lease $

c-2.

Is it cheaper to buy or lease?

	Buy
	Lease