as part of its overall plant modernizatioon and cost reducation program, the managment of tanner-woods textile mills has decided to nstall anew automated weaving loom. in the capital budgeting analysis of this equipment, the IRR of the project was 15%. The loom has and invoice prices of $250,000 including delivery and installation charges. The funds needed could be borrowed from the bank through a 4 yar amortizeed loan at a 10% interest rate, with payments to be made at year-end. in the event the loom is purchased, the manufacturer will contract to maintain a nd wercie it for a fee of $22,000 per year paid at year-end. the loom fails in the MSCRS 5 year class, and Tanner-Woods marginal federal plus state tax rate is 40%. the applicable MACRS rates are 22%, 30%, 17%, 16%, and 5%. United Automation inc. maker of the loom, has offered to lease the loom to Tanner-woods for $70,000 upon delivery and installation (at t+0) plus 4 addditional annual lease payments of $70,000 to be made at the end of years 1 through 4. (note that there are 5 lease payments in total) The lease agreement includes maintenance serviceing. Acutally, the loom has an expected life of 10 years, at which time its expected salvage value is zero; howere, afer 4 years, its market value is expected to equal its book balue of $43,000. Tanner-woods plans to build an entirely new plant in 4 years, so it has no interest in leasing or woning the proposed loom for more than that period. a.) should the loom be purshced? pv cost of owning at 6% is $_______ PV cost of leasing at 6% is $______ b) the salvage value is clearly the most uncertain cash flow in the analysis, assume the appropriate saslvage value pretax discount rate is 15%. what wouled the effect of a salvage value risk adjustment on the decision? NPV is $_______?