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To meet new business demand, you've decided to buy or lease a new tower crane for...

To meet new business demand, you've decided to buy or lease a new tower crane for use over the next 4 years. You have two choices:

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1. Buy the crane from Terex for $600,000 and sell it back to them in 48 months for $240,000.

2. Lease the crane from Terex for $11,000 per month for 48 months. If you choose to lease the crane, they will make the first and last payments on your behalf (so that you only have to make payments in months 2 through 47).

The opportunity cost of capital is 0.8% per month. Should you lease or buy the new crane?

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