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The Mikata Corporation is considering leasing a machine. The machine would cost $226,000 to buy and...

The Mikata Corporation is considering leasing a machine. The machine would cost $226,000 to buy and it would be depreciated straight-line to zero over five years. The machine will have zero salvage value in five years. Mikata can lease the equipment for $49,000 per year for five years, with the lease payment due at the beginning of each year. The firm can borrow at a rate of 6%. The firm has a tax rate of 25%. What is the after-tax cash flow from leasing relative to the after-tax cash flow from purchasing in year 0? $226,000 $189,250 $171,750 $49,000 $95,500

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