Lorenzo Airlines needs a new plane. It can be purchased for $150million; or it can be leased for 10 years at $20million per year payable in advance. Lorenzo's tax rate is 30 percent and it can  borrow on a secured basis at 12% before tax. The required (after tax) rate of return on projects of  comparable risk is 16%. Aircraft are depreciated on a straight line basis to a zero residual value over  10 years. Since regulations require that planes be grounded after 10 years the actual residual value is negligible. 

The appropriate discount rate to Calculate the NPV of the lease versus buy decision?