DIY accepts a $7-$year project that requires a special machine. The new machine costs $$25,000$ and has

CCA rate of $25\%.$ The salvage value is $$3,000$ at the end of year $7.$ DIY does not have any other assets in

the asset class. Its cost of debt is $10\%$ and tax rate is $20\%.$

Besides buying the machine, DIY can lease it from ATS leasing company with seven annual lease

payments of $$4,800.$ ATS has many assets in the asset class and the UCC is always positive. Its cost of

debt and tax rate are $8\%$ and $30\%$ respectively.

a$)$ Calculate the NPV of leasing for DIY.

b$)$ What is the maximum annual lease payment that is acceptable to DIY?

c$)$ Calculate the NPV of leasing for ATS.

d$)$ What is the minimum annual lease payment that is acceptable to ATS?