Encore Mobile wants to lease production equipment from ABC Co. The payments are $200,000 per year for 5 years payable at the beginning of each year. Encore won't have to worry about annual maintenance costs if the equipment is leased; ABC Co. has agreed to service the equipment at no additional charge. As an alternative, the bank offered to lend Encore Mobile a loan of $950,000 to purchase the equipment. The loan would be paid in equal instalments at the end of each year for 5 years at an annual interest rate of 11%. At the end of 5 years, the equipment could be sold for an estimated $250,000. However, Encore Mobile would have to pay for annual maintenance fee of the machine estimated at $14,000 per year. Encore Mobile's cost of capital is 13% and the tax rate is 40%. The equipment belongs to a CCA class with a rate of 25%. 2. PV of Leasing Tax Savings is: O$339,559 O$331,559 O$250,000 O$352 267 3. PV Maintenance cost is: O($35,621) O($42,345) O($34,814)