Use the Information for the Question(s)below

Use the information for the question(s) below.
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 $4000 (paid at the end of each month) .Your firm can borrow at 6% APR with quarterly compounding.
-The present value of the lease payments for the delivery truck is closest to:

A) $206,900.
B) $207,050.
C) $207,680.
D) $198,420.

Correct Answer:

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