Chiwen, Inc. is considering whether to replace an office copy machine with a new model. The manager is trying to decide whether to buy the machine outright or lease it from a copier company. He has generated the following information about the two options.

Purchase Option		Lease Option
Purchase price	$ 25,000	Annual lease payment (includes all supplies and maintenance)	$ 7,000
Annual operating costs (paper, toner, maintenance, etc.)	$ 2,000
Useful life	5 years	Contract length	5 years
Salvage value	$ 5,000

Chiwens discount rate is 12 percent. Should the company lease or buy the copier?