Your boss asks you to review an option to lease an equipment storage facility that the firm needs. You are to compare it

[answerhappygod]

Your boss asks you to review an option to lease an equipment
storage facility that the firm needs. You are to compare it with
the purchase of the facility. The following information are
pertinent to your decision: - The facility will be needed for
twelve years - If the facility is leased, the lessor will conduct
all maintenance; if purchased, your firm must conduct maintenance -
Facility maintenance is expected to cost $85000 per year - The cost
to lease the facility is $800000 per year at the beginning of each
year - The purchase price of the facility is $6000000 and the
market value at the end of twelve years is expected to be $3000000
- The before-tax cost of debt is 8%, and the tax rate is 30% - The
company's current EBIT is $1800000 (before leasing or purchasing
the facility). Assuming that the facility has a fifteen-year
depreciation life for tax purposes (i.e. it will not be fully
depreciated by end of twelve years), compute the NPV for each
option and based on the cost, indicate your decision (round to
nearest $1,000). Group of answer choices
LEASE; LEASE NPV = -4034000, BUY NPV = -5184000
BUY; BUY NPV = -4160000, LEASE NPV = -5058000
LEASE; LEASE NPV = -4160000, BUY NPV = -5058000
none of them
BUY; BUY NPV = -4034000, LEASE NPV = -5184000