Question 2: Wandar Beverages is negotiating a lease on a new piece of equipment that would cost S80,000.00 if purchased Wandar could obtain a 4-year amortized loan at a before-tax cost of borrowing of 12% per annum to purchase the equipment. The equipment falls into the MACRS 3-year class and it would be used for 4 years and then sold, because the firm plans to move to a new facility at that time. The estimated value of the equipment after 4 years is $5,000.00. A maintenance contract on the equipment would cost $4,000.00 per year and insurance premium would cost S2,000.00, both payable at the beginning of each year. Alternatively, the firm could lease the equipment for 4 years for a lease payment of $25,000.00 per year, payable at the beginning of each year. The firm is in the 30% tax bracket and its weighted average cost of capital is 14%. If there is a positive Net Advantage to Leasing (NAL) the firm will lease the equipment. Otherwise, it will buy it. What is the NAL? (Note: MACRS rates for Years 1 to 4 are 0.33. 0.45, 0.15, and 0.07 respectively) [Total: 20 marks]