An airline manager has decided to buy an aircraft. Two alternative financing methods are available: use a financial lease, or purchase the aircraft using owner financing and borrowed capital. The financial lease is a three-year arrangement, with annual lease payments of $6 million paid at the beginning of each year. (A lease payment is tax- deductible. Assume that it can be claimed at the beginning of each year.) The manager can buy the aircraft for $20 million and sell it in three years for $5 million. The aircraft must be depreciated over a ten- year period. A bank will lend $15 million and the loan will be fully amortized at 10 percent over three years with annual payments.