Sadik Industries must install $1 million of new machinery in its Texas plant. It can obtain a bank loan for 100% of the required amount. Alternatively, a Texas investment banking firm that represents a group of investors believes it can arrange for a lease financing plan. Assume that the following facts apply.

1.The equipment falls in the MACRS 3 year class.

2. Estimated maintenance expenses are $50,000 per year.

3. The firm