Waterwells Hydraulics is purchasing a new drill. The cost of the drill is $750,000. It will have a 3 year life (straight line depreciation). The tax rate is 40%. The bank has offered to lend at 6%. Maintenance is $25,000 per year. The residual value of the machine in Year 4 is $125,000. Leasing is an option, with payments of $350,000 per year. The lease would be an operating lease. Should the company lease or buy? What is the PV of each option? Show your work.