Save Answer Question 2 18 points You work as a financial analyst at Sauder Woodworking Furniture Company. You are evaluating a potential lease agreement on a new woodworking machine. The new machine can be purchased on January 1 for $18,000 and can be depreciated over 3-year period using Straight Line Method with mid-year assumption. The machine has a 5-year actual life and the salvage value at the end of the 5th year is $500. The operating expenses of the machine will be $600 per year. Instead of purchasing, the company can lease the asset for $5500 at the beginning of each year for 5 years. Operating costs will be paid by the lessor (Assume the lease payments will occur at the beginning of each year and the tax benefits associated with the lease payment occurs at the end of the year) The interest rate on the company's debt is 10%. The weighted average cost of capital of the firm is 14%. The corporate tax rate is 25% ayif you decide to buy the machine, what is the PV of depreciation tax saving? (sample answer $3500:48) What is the PV of Salvage Value? (sample answer $3500.48) What is the total cost of Buying? (sample answer $35000.48) b)if you decide to lease, then what is the Cost of Leasing? (sample answer $35000.48) c)What is Net Advantage to Leasing? (sample answer $35000.48 or-535000) d)ls leasing better or buying is better? (sample answer Buying is better or Leasing is better)