[MACRS table required 0.3333, 0.4445, 0.1481, 0.0741, respectively]

1. BNSF is evaluating a potential lease agreement on a vehicle that costs $80,000 and falls into the MACRS 3-year class. The loan rate would be 9 percent and would be interest only over the 4-year period, with the principal due at the end, if BNSF decided to borrow money and buy the asset rather than lease it. The loan payments would be made at the end of the year. The vehicle has a 4-year economic life, and its estimated residual value is $25,000. If the firm buys the truck, it would purchase a maintenance contract that costs $3,000 per year, payable at the beginning of each year. The lease terms, which include maintenance, call for a $20,000 lease payment at the beginning of each year. BNSF's tax rate is 20 percent. Should the firm lease or buy? Calculate the NAL.

Please show work and formulas!