The problem below allows you to demonstrate your understanding of these concepts. Time to Fly Company needs to expand its facilities. To do so, the firm must acquire a machine costing $80,000. The machine can be leased or purchased. The firm is in the 25% tax bracket, and its after-tax cost of debt is 9%. The terms of the lease and purchase plans are as follows: Lease. The leasing arrangement requires end-of-year payments of $19,800 over 5 years. All maintenance costs will be paid by the lessor; insurance and other costs will be borne by the lessee. The lessee will exercise its option to purchase the asset for $24,000 at the termination of the lease. Purchase. If the firm purchases the machine, its cost of $80,000 will be financed with a 5-year, 10% loan requiring equal end-of-year payments. The machine will be depreciated under MACRS using a 5-year recovery period (depreciation rates of 20%, 32%, 19%, 12%, and 12%, respectively). The firm will pay $2,000 per year for a service contract that covers all maintenance costs; insurance and other costs will be borne by the firm. The firm plans to keep the equipment and use it beyond its 5-year recovery period. (Hint: solve for the annual end-of-year loan payment first.) Determine the after-tax cash outflows of Time to Fly Corporation under each alternative. Find the present value of each after-tax cash outflow stream, using the after-tax cost of debt (9%) as your discount rate. Which alternativelease or purchasewould you recommend? Why? An illustrative example of how you can set up your work is belownote this setup is merely an example only and not required.