Lease analysis Answer: b Diff: T41. Furman Industries is negotiating a lease on a new piece of equipment thatwould cost $100,000 if purchased. The equipment falls into the MACRS3-year class, and it would be used for 3 years and then sold, becauseFurman plans to move to a new facility at that time. The applicable MACRSdepreciation rates are 0.33, 0.45, 0.15, and 0.07. It is estimated thatthe equipment could be sold for $30,000 after 3 years of use. Amaintenance contract on the equipment would cost $3,000 per year, payableat the beginning of each year of usage. Conversely, Furman could leasethe equipment for 3 years for a lease payment of $29,000 per year, payableat the beginning of each year. The lease would include maintenance.Furman is in the 20 percent tax bracket, and it could obtain a loan topurchase the equipment at a before-tax cost of 10 percent. Furman shoulda. Either lease or buy; the costs are the same.b. Lease; the PV of leasing costs is $5,736 less than the PV of owningcosts.c. Lease; the PV of leasing costs is $1,547 less than the NPV of owningcosts.d. Buy; the PV of owning costs is $5,736 less than the PV of leasingcosts.e. Buy; the PV of owning costs is $1,547 less than the PV of leasingcosts.