Google LLC is considering leasing a new office building. The lease terms are $10 million per year for 5 years. Alternatively, the company can purchase the office building for $40 million, which has a useful life of 20 years and a salvage value of $5 million. The company's cost of capital is 7%.

• Requirements:
  • Calculate the total cost of leasing over 5 years.
  • Calculate the annual depreciation expense if the office building is purchased.
  • Determine the present value of the lease payments.
  • Compare the financial implications of leasing vs. buying and provide a recommendation.