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Microsoft Corporation is evaluating the lease versus buy decision for office space in its headquarters. The company has the option to lease office space for

Microsoft Corporation is evaluating the lease versus buy decision for office space in its headquarters. The company has the option to lease office space for $1 million per year or purchase a building for $10 million. If purchased, Microsoft expects annual maintenance and operating costs of $500,000. Calculate the net present value (NPV) of leasing versus buying office space for Microsoft Corporation, assuming a discount rate of 8%.

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