To determine whether AA should purchase or lease a new production equipment for its Montreal site, you have been provided with the following information: - The acquisition cost of the new production equipment is $500,000. Its estimated useful life is 6 years, at the end of which it is expected to have a net salvage value of $75,000. The equipment is subject to a CCA rate of 17%. - If AA alternatively decides to lease the new equipment, then the required lease payments would be $55,000 per year, made at the beginning of each year, for the 6-year useful life. - AA's tax rate is 35%, its cost of capital is 10% and its pre-tax cost of borrowing is 8%. Based on the information provided, determine whether AA should purchase or lease the new production equipment for its Montreal site. Question 2: Assuming 20\% tax rate, 30\% CCA rate and 8% discount rate, recommend the better of the following equipment, with support