Mitropolsky Metals is considering acquiring a new smelting machine. The cost of the machine is $60,000 and it is expected to have a useful life of 10 years at which time it will have a salvage value of $5,000. MM is able to borrow from its bank at 8%, payable in blended payments at the end of each year. An alternative method of financing the acquisition would be to lease the equipment for 10 years for $8,500 per year, payable at the beginning of each year. The machine would have a CCA rate of 20% and the company has an effective tax rate of 25%. Due to the added uncertainty of the salvage value, the company would like to use the marginal cost of capital of 15% to calculate the discounted salvage value a) Required: Use NPV analysis to determine whether the company should buy or lease the machine. (11 marks) b) Describe the key advantages of lease financing