Heidi Incorporated is considering whether to lease or purchase a piece of equipment. The total cost to lease the equipment will be $131,000 over its estimated life, while the total cost to buy the equipment will be $83,000 over its estimated life. At Heidis required rate of return, the net present value of the cost of leasing the equipment is $73,400 and the net present value of the cost of buying the equipment is $68,000. Based on financial factors, Heidi should:

Multiple Choice

lease the equipment, saving $5,400 over buying.

buy the equipment, saving $48,000 over leasing.

lease the equipment, saving $48,000 over buying.

buy the equipment, saving $5,400 over leasing.