LEASE VS.

BUY Car
Inputs
Discount Rate 8.0%

Lease 0 1 2 3
Lease Payment $4,100
Present Value of Each Cash Flow
Present Value of Lease Cost

Buy 0 1 2 3 4
Purchase Price and Residual Value $32,000 ($21,000)
Present Value of Each Cash Flow
Present Value of Buy Cost
LEASE VS. BUY Corporate
Inputs
Machine lease payment $5,400
Loan rate 6%
Number of loan payments 5
Corporate tax rate 40%

Lease 0 1 2 3 4 5 6
After-Tax Lease Payment
Residual Purchase Cost $12,600
After-Tax Cash Flows
Present Value of Each Cash Flow
Present Value of Lease Cost

Buy 0 1 2 3 4 5 6