Question 5: Leasing Explain how the cost of debt and the resale value of leased asset affect the lease rate? Maintenance costs can make the lease analysis a complicated affair. Explain how maintenance affects financial lease calculations. After a capital budgeting process, MMC (a non-Ghanaian firm) has decided to acquire a plastic-moulding machine. If purchased, the firm would be able to depreciate its $350,000 cost at a CCA rate of 20%. Lease Financing Ltd has offered to lease the same machine to AMC for $80,000 a year for the five years with the lease payments being made in advance. Should the moulding machine be leased if the firms before-tax cost of debt is 15% and its marginal tax rate is 40%?