Assuming 0% taxes. Equipment can be leased at $12,000 per year (first payment at the end of year) for nine years or purchased at a cost of $68,000. The company has a weighted average cost of capital of 12%. A bank has indicated that it would be willing to make the loan of $68,000 at a cost of 10%. There is no salvage value. Should the company buy or lease?
A. None of them
B. Buy; PV of Buy option lower than Lease option
C. Buy; PV of Lease option lower than Buy option
D. Lease; PV of Lease option lower than Buy option
E. Lease; PV of Buy option lower than Lease option