g. (1) Assume that the lease payments were actually $280,000 per year, that Consolidated Leasing is also in the 40% tax bracket, and that it also forecasts a $200,000 residual value. Also, to furnish the maintenance support, Consolidated would have to purchase a maintenance contract from the manufacturer at the same $20,000 annual cost, again paid in advance.

Consolidated Leasing can obtain an expected 10% pre-tax return on investments of similar risk. What would be Consolidated’s NPV and IRR of leasing under these conditions?