Leasing is a way of borrowing: instead of taking a loan to buy, you commit to fixed payments. So compare the two as financing choices, at the after-tax cost of borrowing: the loan rate x (1 - tax rate). Using the company's WACC here is a common mistake: the lease payments are as certain as loan payments, so they deserve a debt rate.
Lay out each choice's cash flows by year, after tax:
- Buy: the price today; then the depreciation tax shield each year (depreciation x tax rate); and the residual value at the end, after tax on the gain.
- Lease: each payment less the tax it saves, paid at the start of each year: years 0 to 4 for a five-year lease, not 1 to 5.
Both NPVs are negative: they're costs. The better choice is the one closer to zero, the higher NPV.