Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 49

National Parcel Service has historically owned and maintained its own delivery trucks. Leasing is an option being seriously considered because costs for maintenance, fuel, insurance, and some liability issues will be transferred to Pacific Leasing, the truck leasing company. The study period is no more than 24 months for either alternative. The annual lease cost is paid at the beginning of each year and is not refundable for partially used years. Use the first cost and net cash flow estimates to determine the payback in months with a nominal 9% per year return for the
a) purchase option and b) lease option.