Building Specialists Inc. is evaluating the possibility to purchase or lease $$220,000$ worth of excavation equipment. If leased, the annual lease payments would be $$55,000$ per year for five years. If instead purchased, the equipment will be depreciated on a straight$-$line basis over five years, after which it will be worthless. Assume Riverton$$s borrowing c

a$.$ If Building Specialists Inc. purchases the equipment, what is the amount of the lease$-$equivalent loan?

b$.$ Is Building Specialists Inc. better off leasi

c$.$ What is the effective after$-$tax lease borrowing rate? How does this compare to Building Specialists Inc.$$s actual after$-$tax borrowing rate?