XYZ Cat Inc. is debating between two alternative earth moving machines to use for the next 8 years. The first supplier, Double Candle, offers the necessary machinery (CCA rate = 30%) at an upfront cost of $5,450,000. These machines are expected to last 4 years and then be salvaged for approximately $1,400,000 (the CCA pool remains open). All the Double Candle machines would be salvaged and replaced after 4 years. The alternative is to purchase significantly more expensive (but longer lasting) machinery from Elemental which would last the full 8 years but cost $8,650,000 and depreciate at the same CCA rate. Elemental's machines have an expected salvage value of approximately $1,800,000. XYZ Cat pays a 25% tax rate and its cost of capital is 11%. a) Which of the two systems incurs the lowest overall cost for XYZ Cat? (4 marks) b) For what salvage value on the Elemental machines would you be indifferent between the two options? (2 marks)