Imagine yourself in the position of Thomas Pierce III, president of Greymare Bus Lines. Your firm was established by your grandfather,

who was quick to capitalize on the growing demand for transportation between Widdicombe and nearby townships. The company has

owned all its vehicles from the time the company was formed; you are now reconsidering that policy. Your operating manager wants to

buy a new bus costing $$96,000.$ The bus will last only eight years before going to the scrap yard. You are convinced that investment in

the additional equipment is worthwhile. However, the representative of the bus manufacturer has pointed out that her firm would also

be willing to lease the bus to you for eight annual payments of $$16,500$ each. Greymare would remain responsible for all maintenance,

insurance, and operating expenses. If Greymare does not own the bus, it cannot depreciate it$,$ and therefore, it gives up a valuable

depreciation tax shield. We assume depreciation would be calculated immediately. All payments are in advance, that is$,$ at the start of

each year. Greymare's borrowing rate is $8\%.$ Assume this is a financial lease.

a$.$ What is the value of the lease if Greymare's marginal tax rate is $T_c=0\mathrm{.}30?$

b$.$ What would the lease value be if the tax rate is $21\%,$ but for tax purposes, the initial investment had to be written off in equal

amounts over years $1$ through $5?$

Note: For all requirements, a negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter

your answers in thousands rounded to $2$ decimal places.