General Electric (GE) is considering whether to lease or buy new equipment. The following data is available:

14. 
    
    • Purchase Price: $10 million
    • Lease Payments: $2.2 million per year for 5 years
    • Discount Rate: 6%

Requirements:

14. 
    
    3. Calculate the present value of the lease payments.
    4. Determine the total cost of buying the equipment.
    5. Compute the net advantage to leasing (NAL).
    6. Analyze the financial impact of leasing versus buying.
    7. Make a recommendation on whether GE should lease or buy the equipment.