3. A tax-exempt organization needs a new truck to haul donations to its warehouse. The firm believes, based on its analysis, that this investment adds value. The firm can borrow funds at 4% and buy the truck for $70,000. Alternatively, a lessor offers to lease a truck to the firm on a five-year lease. ABC will pay the lessor $16,000 every year at the beginning of each year. The truck has an estimated pre-tax salvage value of $9,000 after five years. What is the Net Advantage to Leasing? Should the firm lease? The 5-year MACRS is: Year Depreciation (%) 1 20% 2 32 3 19.2 4 11.52 5 11.52 5.76