LM 12 Lease vs Buy Extra Problems Problem 1: You are the CFO of a business and have three different options for purchasing a piece of equipment to expand your current production capacity. Buy $ 800,000 10% Lease Option 1 $ 50,000 Lease Option 2 $ 10,000 Cost/Down payment Interest Rate Term (years) Annual Payment Purchase amount at end of lease 3 $ 300,000 5 $ 200,000 $ 25,000 $ 75,000 Problem 2: You are the CFO of a business and have three different options for purchasing a building to expand your corporate headquarters. Buy $ 1,600,000 7% Lease Option 1 $ 150,000 Lease Option 2 $ 100,000 Cost/Down payment Interest Rate Term (years) Annual Payment Purchase amount at end of lease 5 $ 340,000 7 $ 250,000 $ $ 125,000 $ 175,000