Lease vs Buy - 10 Marks Cameron Caans Corporation is debating whether to acquire an asset through an operating lease arrangement or to borrow funds and purchase the asset. The purchase price of the asset, $125,000 can be financed with a five-year, 8% bank loan. If purchased, the asset will be placed in a CCA class of 20% with an expected salvage of $7,000, at the end of its five-year life. Annual before- tax costs of service and repair are estimated at $1,600 under the purchase option. Alternatively, the firm can obtain the use of the asset with an operating lease of five years. The lease payments would be $31,000 per year. The firm's tax rate is 30% and its cost of capital is 14%. Lease payments are to be paid at the beginning of each year. Which alternative should be selected based on minimizing the present value of aftertax costs? Show full details for all steps to support your conclusions