Suppose Proctor? & Gamble? (P&G) is considering purchasing $15 million in new manufacturing equipment. If it purchases the? equipment, it will depreciate it for tax purposes on a? straight-line basis over five? years, after which the equipment will be worthless. It will also be responsible for maintenance expenses of $1.00 million per?year, paid in each of years 1 through 5. It can also lease the equipment under a true tax lease for ?$4.1 million per year for the five? years, in which case the lessor will provide necessary maintenance. Assume? P&G's tax rate is 30 % and its borrowing cost is 6.0%.

a. What is the NPV associated with leasing the equipment versus financing it with the? lease-equivalent loan?

b. What is the? break-even lease ratelthat ?is, what lease amount could? P&G pay each year and be indifferent between leasing and financing a? purchase?