This is a challenge problem. Jack and Jill Company (JJC) has a tax rate of 30 per cent. It is looking at obtaining a new laser scanner that identifies potential melanomas. The cost is $50 000 but JJC can lease it for $3 521 a month, with payments made in advance for the next tax year. Alternatively, it can borrow at 8.24 per cent per year with payments of $4 042 a month in arrears. The lease has a residual of $10 000 when the salvage value will be $12 000. Because of the special nature of the equipment the Commissioner of Taxation will allow monthly depreciation of $3 000. Should JJC lease?