Emerson Corporation is trying to decide whether to lease or purchase a piece of equipment needed for the next $5$ years. The equipment would cost $$517,000$ to purchase, and maintenance costs would be $$21,200$ per year. After $5$ years, Emerson estimates it could sell the equipment for $$101,100.$ If Emerson leases the equipment, it would pay $$151,700$ each year, which would include all maintenance costs. Emerson$$s cost of capital is $15\%.($Future Value of $$1,$ Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity of $$1)$

Note: Use appropriate factor from the PV tables.

Required:

What is the net present value of the cost of purchasing the equipment?

What is the net present value of the cost of leasing the equipment?

Based on financial factors, should Emerson purchase or lease the equipment?