While leasing a machine you could buy 100000 cash or


While leasing a Machine you could buy $100,000 cash, or finance for 3 years at 2%, 0 down; or lease for $16,704/year for 3 years with $0 down and buy out is $55,000. Marginal tax rate is 15%. Cost of equity capital once with 0% then again with 20%. Which option has the lowest NPV of costs under each scenario and why?

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