Hittel, Inc. is considering leasing or purchasing a small aircraft to transport executives between manufacturing facilities and the main administrative headquarters. The firm is in the 40% tax bracket and its after?tax cost of debt is 7%.

The estimated after?tax cash flows for the lease and purchase alternatives are given below:

End of Cash Flows (after?tax)

Year Lease Purchase

1 ? 64,329 ? 68,454

2 ? 64,329 ? 59,110

3 ? 64,329 ? 63,596

4 ? 64,329 ? 66,633

5 -64,329 - 30,056

Given the above cash outflows for each alternative, calculate the present value of

the after?tax cash flows using the after?tax cost of debt for each alternative.