Shine Ltd is considering purchasing or leasing new equipment. If it purchases the equipment it will cost $600,000 and if it leases the equipment it will be required to pay six rentals of $115,000 each. The equipment can be depreciated over three years on a straight-line basis for tax purposes. The residual value is expected to be zero and the tax rate is 30%. What is the incremental cash flow in Year 3 for leasing the equipment rather than buying it for Year 3? Assume that rental payments are paid at the beginning of each period.

As above, but calculate the NPV (approx.) of the lease relative to an equivalent loan. Assume the cost of debt after-tax is 10%. Assume that the tax savings on the lease payment occurs at the time the payment is made.

(Please provide the answer with working process.)