5.Lease valuation. Suppose that national Waferonics has before it a proposal for a four-year lease. The firm constructs a table like Table 17.1. The bottom line of its table shows lease cash flows:

Year	0	1	2	3
The cash flow	+62,000	-26,800	-22,200	-17,600

These flows reflect the cost of the machine. CCH tax shield, and the after tax payments. Ignore salvage value. Assume the firm could borrow at 10% and faces a 30% marginal tax rate. (L02, L03).

a) What is the value of the equivalent loan?

b) What is the value of the lease?

c) Suppose the machines and PD under normal finance is $5000. Should national Waferonics invest? Should it sign the lease?

Please show all caculcations and formulas