Complete all excel tables for the questionA cost comparison between owning and leasing an asset worth

$$1$ million.

We have the following assumptions:

$-$The equipment is deemed essential to our ongoing operations. In other

words, we MUST purchase this equipment to ensure our firm's survival.

Therefore, the purchase decision is already approved whether NPV of the investment for equipment is postive, negative or $0.$

Theretore, ine purchase decision is equipmentis is postive, negative or $0.$

$-$A purchase in cash $($without the assistance of debt$)$ is not a viable alternative

Life of the asset is $10$ years.

Our income tax rate is $35\%$

Our firm requires a minimum rate of return of $12\%$ on any invested funds

Residual $($and salvage$)$ value of the asset is $$0$

Option $1-$ Enter into a $10-$year lease agreement.

$-$Annual installment payments are $$150,000($before tax$).$

$-$Each payment occurs at the beginning of each year, i$.$e$.$ we are paying for

"next year" as opposed to "last year"

$-$The Lessor $($not us$),$ will be responsible for any$/$all maintenance expensesA cost comparison between owning and leasing an asset worth $$1$

million.

We have the following assumptions:

$-$The equipment is deemed essential to our ongoing operations. In other words, we

MUST purchase this equipment to ensure our tirm's survival.

$-$Therefore, the purchase decision is already approved whether NPV of the investment for equipment is

positive, negative or $0.$

$-$A purchase in cash is not a viable alternative

Life of the asset is $10$ years.

Our income tax rate is $35\%$

Our firm requires a minimum rate of return of $12\%$ on any invested funds

Residual $($and salvage$)$ value of the asset is $$0$

Option $2-$ Purchase the asset using debt.

Obtain a new long$-$term debt with $10\mathrm{.}00\%$ interest rate

$-$The loan has equal annual principal and interest payments $($occurring at the end of

each year$)$

$-$The loan will be repaid in full in exactly $10$ years' time

$-$The asset will be depreciated on a straight$-$line basis $($i$.$e$.$ equally over a $10-$year

period$).$

$-$The asset's owner $($us$)$ is responsible for all maintenance expenses, estimated at

$$20,000$ per year.