6. Suppose that you are contemplating the purchase of a minicomputer at a cost of

$1000. The expected lifetime of the asset is three years. You expect to lease the asset to a business for $400 annually (payable at the end of each year) for three years. If you can borrow (and lend) money at an interest rate of 8 percent, will the investment be a profitable undertaking? Is the project profitable at an interest rate of 1 2 percent?

Provide calculations in support of your answer.