Wild Pet, Inc., a Pets's food and supplement firm, is considering the acquisition of a new "Cats Croquette" processing machine. Wild Pet can purchase the machine through the use of its normal financing mix (35% debt and 65% common equity) or lease it. Pertinent details follow: Acquisition price of the machine Useful life Salvage value $45,000 4 years $5,000 Depreciation method Straight-line Annual cash savings before tax and depreciation from the machine $16,000 Rate of interest on a four-year installment loan 12% Marginal tax rate 40% Annual rentals (four-year lease) Annual operating expenses included in the lease Cost of capital Calculate the NAL $13,000 $1,750 14%