as follows:

the asset for $$6,500$ at termination of the lease. Ignore any future tax benefit associated with the purchase of the equipment at the end of year $3$ under the lease option.

recovery period.

a$.$ Calculate the after$-$tax cash outflows associated with each alternative. $($Hint: Because insurance and other costs are borne by the firm under both alternatives, those costs can be ignored here.$)$

b$.$ Calculate the present value of each stream, using the after$-$tax cost of debt.

c$.$ Which alternative$-$lease or purchase$-$would you recommend? Why?

Data table

a$.$ The after$-$tax cash outflow associated with the lease in year $1$ is $$22040.($Round to the nearest dollar.$)$

The after$-$tax cash outflow associated with the lease in year $2$ is $$22040.($Round to the nearest dollar.$)$

The after$-$tax cash outflow associated with the lease in year $3$ is $$28540.($Round to the nearest dollar.$)$

The after$-$tax cash outflow associated with the purchase in year $1$ is $$,($Round to the nearest dollar.$)$