ABC needs a new machine that costs $$24,000.$ The machine has CCA rate of $30\%$ and it is the

only asset in the asset class. The salvage value is $$2,750$ at the end of year $10.$ ABC's cost of

debt and tax rate are $8\%$ and $25\%$ respectively.

$xYZ,$ a leasing company, offers ABC a $10-$year lease with annual lease payment of $$3,000.$ Its

cost of debt and tax rate are $5\%$ and $40\%$ respectively. XYZ has many assets in the asset class

which is expected to have positive UCC in the foreseeable future.

a$)$ Calculate the NPV of leasing for ABC and XYZ$.$

b$)$ What is the maximum annual lease payment acceptable to ABC $?$

c$)$ What is the minimum annual lease payment acceptable to XYZ$?$