CANADIAN TAX FACTORS $-$ SEE PICTURE FOR MORE INFO ABOUT THE CASE. ALL CASE FACTS IN UPLOADED PICTURE

The are two options to buy or lease a new ride, with a $10$ year useful life.

For simplicity, assume the following:

The figures provided may or may not be relevant. You have to exercise professional judgement.

Calculate the PV CCA tax shields and other applicable tax shields for BOTH the lease and the buy options. The net annual operating cash flows are provided after$-$tax. Additional cells might or might not be needed to fill in the table.

Purchasing: $$500,000$ price. Yearly maintenance of $$20,000.$ One$-$time training expense in year $5$ $$32,000.$ Salvage value in Year $10$: $$75,000.$ Net after$-$tax cash flows: $$75,000$

Leasing: $$90,000$ at the beginning of each year. No other expenses. Net after$-$tax cash flows: $$75,000.$

Requirement #$1$: Create a DCF analysis of both options. Calculate the NPV$,$ IRR, MIRR, and PI for each project. Use the table below as a guidance. I need to see how you arrive at each annual

cash flow so do not give me just a number. That's why I am providing you a table as a template so you can clearly show your work. Points will be deducted if cells do not have formulas or it is not clear how you got a number.

I need to see a break down of all cash flows. Use the PV CCA formula to calculate the CCA shields and input them in Year $0$for both options as applicable.

Requirement #$2$: Calculate the NPV$,$IRR$,$ MIRR, and PI of each option.

There needs to be a tax shield calculated for the lease option.

Tax: $30\%,$ CCA $20\%,$ Discount rate: $6\mathrm{.}1\%.$ Useful life: $10$ years.