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In this video tutorial, we learn how to make a decision between leasing or purchasing a computer. The cost of the computer is $2,000, with an annual lease payment of $700. If purchased, the full cost is paid upfront, whereas leasing involves paying $700 annually for three years. To compare the two options, we need to calculate the net present value of the cash flows. One method is to use Excel to add up the initial cash flow and use the NPV function for further calculations.