1. The machinery falls into the MACRS 3-year class. (The depreciation rates for Year 1 through Year 4 are equal to 0.3333,0.4445, 0.1481 , and 0.0741. ) 2. Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance. 3. The firm's tax rate is 25%. 5. The lease terms call for $410,000 payments at the end of each of the next 4 years. $ $