Please do a hand written work

Your firm needs to either buy or lease $$230,000$ worth of vehicles. The

vehicles have a life of $4$ years after which time they are estimated to worth

$$76,000.$ The vehicles belong in CCA class $10($a $30\%$ class$)$ and can be

leased at a cost of $$68,000$ a year $($beginning of year payment$)$ for the $4$

years. The corporate tax rate is $34\%,$ the cost of borrowing is $10\%$ and the

lease qualifies as a true tax lease.

You have estimated the following:

$2$

Winter $2024$

$(1)$Annual repairs and maintenance on the vehicles will be $$7,000.$ Under

the terms of the lease, the lessor is responsible for repairs and

maintenance.

$(2)$ Annual gas and bridge passes will cost $$4,000$ per year.

a$)$ Prepare a Net Advantage to Leasing analysis. Should your firm buy or lease the

vehicles? Show all your work. $(15$ marks$)$

b$)$ How would you answer to part $($a$)$ change if the lessee was responsible for repairs and

maintenance? Show your work.