Nodhead College needs a new computer. It can either buy it for $200,000 or lease it from Compulease. The lease terms require Nodhead to make 6 annual payments (prepaid) of $45,000. Nodhead pays no tax. Compulease pays tax at 30%. Compulease can depreciate the computer for tax purposes at a CCA rate of 30%, and will close the asset pool at the end of the sixth year. The first CCA tax saving is available in year 0. The computer will have no residual value at the end of year 5. The interest rate is 7%.

a) What is the NPV of the lease for Nodhead College? (Round your answer to the nearest dollar. Use minus sign to enter negative NPV, if any.)

b) What is the NPV for Compulease?

c) What is the overall gain from leasing?