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Your company needs to use a light general-purpose truck (asset class 00.241) for a period of two years. The company uses MACRS (ADS) for depreciating

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Your company needs to use a light general-purpose truck (asset class 00.241) for a period of two years. The company uses MACRS (ADS) for depreciating its assets, has an effective income tax rate of 25% and requires an after-tax MARR of 10%. Your manager asked you to examine whether to purchase or to lease the truck using the data shown in Table 1. a. Set up tables to calculate the after-tax cash flow for each alternative (20 points) b. Set up the equations to determine which alternative is preferred based on PW analysis (13 points) c. Solve the equations in (b) and determine which alternative is preferred (2 points) di &dn=/de Purchase Lease s dz-dudu Capital Investment $50.000 n/a Annual lease payment n/a $15,000 $5,000 $5,000 Annual operating expenses 0,000 st 10,000 $5,000 n/a Purchnen $25,000 MV of the truck @ EOY 2 205-46 Table 1 -5 years - C

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