Problem:
Your landscaping company can lease a truck for $8,200 a year for 5 years. It can instead buy the truck for $35,000. The truck will be valueless after 5 years.
Task:
Question 1: What is the present value of the lease payments, if the opportunity cost of capital is 6%?
Question 2: Is it cheaper to buy or lease?
Note: Explain all steps comprehensively.