2. A new equipment has been proposed for a manufacturing plant. If the equipment is installed, it will have an initial cost of $100,000 and will produce net savings of $50,000 per year over its life of 10 years. It is expected to have zero salvage value at the end of that time. Two financing alternatives are under consideration. The first alternative is to obtain credit from the supplier and this calls for a bank loan with interest of 12% per year with the total amount to be paid in equal amounts over a 3-year period. The second alternative is that the equipment will be leased at a cost of $3,000 per year, paid at the end of each year. If the straight-line method is used and the effective income tax rate is 32%, which financing alternative is more desirable? The company uses an after-tax rate MARR of 15%. Use the PW method in the evaluation of the alternatives.