Question: Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs 551,000, has

Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs 551,000, has a 3-year life and will be worthless after the 3 years. The pre-tax cost of borrowed funds is 6 percent and the tax rate is 34 percent. The equipment can be leased for $20,000 a year. What is the NPV of leasing instead of buying? 5-6,365 B. 5-1,357 C.5-4.098 D. 5-1,711

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