Suppose Clorox can lease a new computer data processing system for 971,000 per year for five years. Alternately it can purchase the system for 4.22 million. Assume Clorox has a borrowing cost of 6.7% and a tax rate of 35% and the system will be obsolete at the end of two years.

A. If Clorox will depreciate the computer equipment on a straight line basis over the next five years, and if the lease qualifies a true tax lease qualifies as a true tax lease. Is it better to lease or finance the purchase of the equipment?

B. Suppose that if Clorox buys the equipment, it will use accelerated depreciation for tax purposes. Specifically, suppose it can expense 20% of the purchase price immediately and can take depreciation equal to 32%, 19.2%, 11.5%, 11.52% and 5.76% of the purchase price over the next five years. Compare leasing with purchase in this lease.

C. If Clorox buys the equipment it will pay 4.22 million upfront and have depreciation expenses of ____ per year, and generating a depreciation tax shield of____per year for years 1-5

Please if you can break this down step by step, and also this question has 12 parts. Thank You