(19) Azola Corp must install a new computer system that costs $1.4 million. This cost includes delivery and installation expenses. The company can obtain a bank loan for the full amount at 5% nominal interest rate, annual compounding. The loan will be amortized over the 4-year life of the computer, with payments made at the end of each year. The computer will be depreciated over 4 years on a straight-line basis. Because technology is changing rapidly, the computer will be used only for 4 years after which it has zero salvage value. If the computer is purchased, a maintenance contract on the computer will cost $30,000 per year, payable at the end of each year. Alternatively, the company can lease the computer for 4 years for lease payments of $350,000 per year, payable at the beginning of each year. All maintenance cost will be borne by the lessor and the lessor will own the machine at the expiration of the lease. The firm is in the 20% tax bracket. The present value cost of borrow-and-buy is closest to: (A) (B) -$0.471 million -$1.168 million -$1.233 million -$2.667 million -$2.380 million (E) (20) Based on the information given in Multiple Choice Question (19), the present value cost of leasing is closest to: (A) (B) -$0.254 million -$0.264 million -$1.016 million -$1.043 million -$1.057 million (D) (E)