Heidi Incorporated is considering whether to lease or purchase a piece of equipment. The total cost to lease the equipment will be $135,000 over its estimated life, while the total cost to buy the equipment is $82,000 over its estimated life. At Heidi's required rate of return, the net present value of the cost of leasing the equipment is $82,600 and the net present value of the cost of buying the equipment is $76,000. Based on financial factors, Heidi should:
Multiple Choice
buy the equipment, saving $6,600 over leasing.
lease the equipment, saving $53,000 over buying.
lease the equipment, saving $6,600 over buying.
buy the equipment, saving $53,000 over leasing.