Colourful Graphics is considering acquiring a state-of-the-art printing machine and is trying to decide whether to purchase the machine or lease it from the manufacturer. Royal Bank has offered to lend the company the $80,000 required to purchase the machine over 6 years at 8% per annum. The salvage value of the equipment is estimated at $25,000. The manufacturer, on the other hand is proposing an operating lease over 6 years with annual lease payments of $16,000. If the equipment is owned it is expected that annual maintenance costs for the machine would amount to $600. Colourful Graphics tax rate is 20 percent and its cost of capital is 12 percent. The printing machine has a CCA rate of 20%

Required: Advise Colourful Graphics which alternative they should choose, providing them with calculations to support your recommendation.