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A company needs to decide whether to buy or lease new equipment. The company can...

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Accounting

A company needs to decide whether to buy or lease new equipment. The company can buy the equipment for $2,500,000. If leased, the company will be required to pay maintenance costs annually. Consider the following: Present Value of Lease Payments Before-tax = $1,400,000; Present Value of Lease Payments Tax Shield = $280,000; PVCCATS = $650,000; Present Value of Salvage Value = $600,000; Present Value of Annual Maintenance Costs After-tax = $5,000. Assume you were computing the NAL for the company. What amount would you use in your analysis for the present value of buying?

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