Present value of owning is $724,341.

Now assume that the equipments residual value could be as low as $0 or as high as $400,000, but $200,000 is the expected value. Because the residual value is riskier than the other relevant cash flows, this differential risk should be incorporated into the analysis. Describe how this could be accomplished. (No calculations are necessary but explain how you would modify the analysis if calculations were required.) What effect would the residual values increased uncertainty have on Lewis lease-versus-purchase decision?

The lessee compares the present value of owning the equipment with the present value of leasing it. Now put yourself in the lessors shoes. In a few sentences, how should you analyze the decision to write or not to write the lease?