Your firm will either purchase or lease a new $500,000 packaging machine from the manufacturer. If...

Your firm will either purchase or lease a new $500,000 packaging machine from the manufacturer. If purchased, the machine will be depreciated straight-line over five years. You can lease the machine using a true tax lease for $125,000 per year for five years with the first payment today. Assume the machine has no residual value, the secured borrowing rate is 9%, and the tax rate is 35%. Should you buy or lease?

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