The Concordia Company has decided to replace an existing machine with a new one that has a purchase cost of $70,000. The old machine has a book value of $20,000 and can be sold for $5,000. The new machine has an expected life of 5 years and an expected salvage value of $8,000. The production manager expects that the new machine will require an overhaul at the end of the third year and estimates the cost to be $10,000, which is tax deductible and paid by the company regardless of whether the equipment is leased or purchased. The new machine can either be purchased or leased. If the latter, the lease payment will be $20,000 per year payable in advance. The Concordia Company can borrow at 8%, its WACC is 12%, and pays tax at 40% marginal rate. The appropriate CCA rate for the machine which is one of many operated by the company is 30%. a) Prepare a lease vs. borrow to purchase analysis b) What if the leasee will pay the overhaul? c) What if the buyer will pay the overhaul?