Airgas Corporation is considering leasing a new equipment. The lease lasts for 5 years. The lease calls for 5 payments of $40,000 per year with the first payment occurring immediately. The equipment would cost $185,000 to buy and would be straight-line depreciated to a zero salvage value over 5 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 6%. The corporate tax rate is 25%. What is the NPV of the lease relative to the purchase if the asset had a pretax salvage value of $6,000 (ignoring any possible risk differences)?

$3,155.91

-$7,628.55

-$8,062.88

$5,376.25

-$6,410.49