A consulting engineering firm can lease a computer system for $1,000 per month or purchase one for $15,000. The leased system will have no monthly maintenance cost, but the purchased one will cost $40 per month. The firm plans to use the system for 16 months. The interest rate is 0.5% per month.

a) Which option should be selected?

b) If the monthly lease cost increases by 10%, which option should be selected?

c) If the purchase price increases by 15%, which option should be selected?

d) If the monthly lease cost increases by 10% and the purchase price decreases by 20%, which option should be selected?

e) If the best prediction for the interest rate is a range between 0.45% and 0.65% per month, how will it affect the choice?