Suppose Procter and Gamble (P&G) is considering purchasing $16 million in new manufacturing equipment. If it purchases the equipment, it will depreciate it on a straight-line basis over the five years, after which the equipment will be worthless. It will also be responsible for maintenance expenses of $0.75 million per year. Alternatively, it can lease the equipment for $3.7 million per year for the five years, in which case the lessor will provide necessary maintenance.

Assume P&G? tax rate is 30% and its borrowing cost is 7.0%.

1. What is the NPV associated with leasing the equipment versus financing it with the lease equivalent loan?
2. What is the break-even lease rate-that is, what lease amount could P&G pay each year and be indifferent between leasing and financing a purchase?

Please help with step by step and do not use excel. Thank you.