Problem 3 [=5 marks) The Blank Button Company Ltd is considering the purchase of a new machine for $30.00D. The machine is expected to save the rm $12.5DD per year in operating costs over a 5 year period. The machine can he depreciated on a straight-line basis to a zero salvage value over its life. Alternatively, the company can lease the machine for $,5 per year for 5 years, with the first payment due in 1 year. The company's tax rate is 34%, and its cost of debt is 10% per annum. All cash ows are assumed to occur at the end of the relevant year. a) Calculate the NPV of the lease versus the purchase decision and indicate whether Blank Button Company Ltd will prefer to lease or buy. (3 marks) b} Calculate the reservation payment ofthe lessee {the maximum lease payment it can make}