A firm urgently needs a large printer and will either lease a printer at an end-of-year cost of $ 5000 for a 6 year period, or they will purchase the printer at an initial cost of $60,000

Calculation of Present value of cash outflow under Lease option: ( based on MARR )

PV = A * ((1+ r)ⁿ-1 ) / ( r*(1+rⁿ)) where A represents the annual payment, r is discount rate , n is number of years.

PV = 5000 * ((1+0.05)⁶-1) / 0.05 * (1+0.05)⁶

PV =  5000 * ( 1.34-1 ) / (0.05 * 1.34)

PV = 5000 * ( 0.34 ) / ( 0.067 )

PV = 5000 * 5.0757 = $ 25378

Therefore cash outflow from Lease option is $ 25378.

Calculation of Present value of cash outflow under BUY option:

Present value of Cash Outflow is $ 60,000 ( no salvage value )

Hence the option c - Lease is the best investment decision and option d - Buy option is not preferred.

IRR of any project should be more than MARR ( hurdle rate ). In the given problem we have taken MARR as discounting rate and arrived at a conclusion that Lease option would be beneficial. If we apply IRR then the discounting rate will be more and present value of Lease payments will be even more lesser than $25378.

Hence, Option a is not correct.

Negative IRR is not justified because the firm has a MARR of 5% and we can't assume that the firm accepts an IRR lesser than MARR hence Option b is not correct.