Suppose a company wants to decide whether to lease or purchase an asset. Purchase: The capital cost required to purchase the asset is $1,000,000 (at time zero) with a salvage value of $500,000 at the end of the 5th year. The purchased asset can be depreciated based on MACRS 5-year life depreciation with the half year convention (table A-1 at IRS ) over six years (from year o to year 5). Lease: The asset can be leased for 5 years and annual operating lease payments (LP) of $250,000 (from year 1 to year 5). The asset would yield the annual revenue of $350,000 for five years (from year 1 to year 5) and operating cost of $60,000 for year 1 to 5. Considering income tax of 35% and minimum ROR of 16%, calculate the ATCF and NPV for both alternatives and conclude which alternative is a better decision. Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period 3-year 5-year 7-year 10-year 15-year Year 20-year 33.33% 44.45 14.81 7.41 20.00% 32.00 19.20 11.52 11.52 14.29% 24.49 17.49 12.49 8.93 10.00% 18.00 14.40 11.52 9.22 5.00% 9.50 8.55 7.70 6.93 3.750% 7.219 6.677 6.177 5.713 5.76 6.23 GBE OVO DAWN - 8.92 8.93 4.46 7.37 6.55 6.55 6.56 6.55 5.285 4.888 4.522 4.462 4.461 5.90 3.28 5.90 4.462 4.461 4.462 4.461 4.462 5 an 4.461 4.462 4.461 4.462 4.461 8 2.231