This question was previously answered by omnivorous-ga on 7/9/03 and I
would like to see the spreadsheet referenced in the initial response. 
Or if anyone else would like to help solving the following problem
with the required formulas, etc.

In addition to the original question I am interested in a comparison
of NPV, discount factor, net cash flow, operating expenses, PV, etc.

Lease or Buy. Your company wants to purchase a new network file server
for its wide-area computer network.  The server costs $75,000. It will
be completely obsolete in three years.  Your options are to borrow the
money at 10 percent or to lease the machine.  If you lease, the
payments will be $27,000 per year, payable at the end of each of the
next three years.  If you buy the server, you can depreciate it
straight-line to zero over three years.  The tax is 34 percent.
Should you lease or buy?

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Request for Question Clarification by omnivorous-ga on 30 Aug 2003 08:38 PDT

Ziggy10 -

Old Omnivorous-GA still has that spreadsheet.  How can we answer it
more fully to help here?

Major changes (up or down) can be made in tax rate; depreciation rate;
implied interest rate; upfront cash -- these are all of the major
items that would be considered in a lease-buy analysis.

Best regards,

Omnivorous-GA

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Clarification of Question by ziggy10-ga on 30 Aug 2003 09:44 PDT

Wonderful.  The link that was provided in the original answer was no
longer active so I have not seen the spreadsheet to assess the
completeness of the response.  If it contains the desired information
/ formulas that is what I am looking for.

Ziggy10 --

Sites to which files are uploaded are often temporary, so files get
cleaned off.  This Excel file has been uploaded here and should be
viewable in your browser, even if you don't have Excel:
http://omnivorous.fateback.com/ziggy.xls

It's clearly a "lease" decision at a 10% cost-of-capital.  Of course
changes in tax rates, depreciation schedules, upfront capital could
change this decision.  The interesting part about the Excel
spreadsheet is the ability to flex each factor or make "what if"
decisions.

Having done these types of calculations in the real world, it's not
unusual that leasing is more attractive, particularly on short-life
properties like cars or rapidly-changing technology.  The leasing
company operates with capital rates competitive with banks, while a
fast-growing company may have a cost-of-capital twice that of a
financial institution.

If this is unclear in any respect or you have troubles accessing this
file, please request a clarification before rating this Google Answer.

Best regards,

Omnivorous-GA