Lease versus purchase JLB Corporation is attempting to determine whether to and of the purchase are as follows or purchase research equipment The t Lease Annual end-of-year lease payments of $26,000 are required over the three-year fe of the lease All maintenance costs will be paid by the lesser insurance and other costs will be borne by the lessee. The lesse wi exorcise its aption to purchase the asset for $3,000 at termination of the lease Ignore any a tax benefit associated with the purchase of the equipment at the end of year 3 under the lease option Purchase The equipment costs $60,000 and can be financed with a 16% loan requiring annual and-of-year payments of $26.715 fee two years JLB wit depreciate the equipment under MACRS ining a three-year recovery period. (See for the applicable depreciation percentages) JLB will pay $2.400 per year for a service contract that covers all maintenance costs Insurance and other costs will be borne by the tim The firm plans to keep the equipment and use it beyond its three-year recovery period a. Calculate the after-tar cash outflows associated with each altamative pst Because insurance and other costs are tome by the fre under beth aeratives, those costs can be ignored here) b. Calculate the present value of each stream, using the ator-tax cost of debt c. Which alternative-lease or purchase-would you recommend? Why?