Noob Noob Corporation wants to acquire a $450,000 computer. Noob Noob has a 30 percent marginal tax rate. If owned, the computer would be depreciated on a straight-line basis to a book salvage value of $0. The actual cash salvage value is expected to be $65,000 at the end of 10 years. If the computer is purchased, Noob Noob could borrow the needed funds at an annual pretax interest rate of 12 percent. If purchased, Noob Noob will incur annual maintenance expenses of $5,000. These expenses would not be incurred if the computer is leased. The lease rate would be $68,000 per year, payable at the beginning of each year. Noob Noobs weighted after-tax cost of capital is 14 percent.

a. Compute the net advantage to leasing.

b. What decision should the company make based on NAL?

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