Scana Corporation is considering leasing a new equipment. The lease lasts for 5 years. The lease...

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Scana Corporation is considering leasing a new equipment. Thelease lasts for 5 years. The lease calls for 5 payments of $34,000per year with the first payment occurring immediately. Theequipment would cost $126,000 to buy and would be straight-linedepreciated to a zero salvage value over 5 years. The actualsalvage value is negligible because of technological obsolescence.The firm can borrow at a rate of 6.5%. The corporate tax rate is25%. What is the NPV of the lease relative to the purchase?
-$9,458.27
-$13,805.76
$21,019.35
-$17,555.12
$16,927.63

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Scana Corporation is considering leasing a new equipment. Thelease lasts for 5 years. The lease calls for 5 payments of $34,000per year with the first payment occurring immediately. Theequipment would cost $126,000 to buy and would be straight-linedepreciated to a zero salvage value over 5 years. The actualsalvage value is negligible because of technological obsolescence.The firm can borrow at a rate of 6.5%. The corporate tax rate is25%. What is the NPV of the lease relative to the purchase?-$9,458.27-$13,805.76$21,019.35-$17,555.12$16,927.63