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Exercise #4: A firm can lease a truck for 5 years at a cost of $45,000...

Exercise #4: A firm can lease a truck for 5 years at a cost of $45,000 annually. It can instead buy a truck at a cost of $95,000, with annual maintenance expenses of $25,000. The truck will be sold at the end of 5 years for $35,000. The cost of capital is 15%. Which is a better option? A. EAC of Lease = [11] B. PV of all Costs of Purchase = [12] C. EAC of Purchase = [13] D. Better Option is to …………[14]………………………….

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