Mad 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.$

Mad 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 Mad Cat?

b$)$ For what salvage value on the Elemental machines would you be indifferent between the two

options?