Problem $8-33$ Equivalent Annual Annuity $($LO$5)$

A firm can lease a truck for $5$ years at a cost of $$39,000$ annually. It can instead buy a truck at a cost of $$89,000,$ with annual

maintenance expenses of $$19,000.$ The truck will be sold at the end of $5$ years for $$29,000.$

a$.$ What is the equivalent annual cost of buying and maintaining the truck if the discount rate is $12\%?$

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Equivalent annual cost

b$.$ Which is the better option?

Buy

Lease