Lease Minus Buy 0 1 2 3 4 5 Lease payments -2,500-2,500-2,500-2,500-2,500 Tax benefits of Lease payments 850 850 850 850 850 () Cost of Machine -10,000 Depreciation Tax benefit 680 680 680 680 680 Total 10,000-2,330-2,330 -2,330-2,330-2,330 If the discount rate before tax is 7.5757%,NPV=-87.68 slide 11slide 11 Lease Minus Buy Lease Minus Buy 0 1 2 3 4 5 Lease payments -2,500 -2,500 -2,500 -2,500 -2,500 Tax benefits of Lease payments 850 850 850 850 850 (-) Cost of Machine -10,000 Depreciation Tax benefit 680 680 680 680 680 Total 10,000 -2,330 -2,330 -2,330 -2,330 –2,330 If the discount rate before tax is 7.5757%, NPV= -87.68