solved You work for a sanitary garment company. Your firm needs

You work for a sanitary garment company. Your firm needs to decide if it is more convenient to lease or to buy a sewing machine to meet the additional demand of medical gowns and face masks. The purchase price of the machine is £95,000 and if purchased, the equipment will be depreciated on a straight-line basis over five years, after which it will be worthless. On the other hand, if you lease the sewing machine, annual payments will be £16,700, with the first of four payments due today. The firm’s pre-tax borrowing cost is 8% and the effective tax rate is 24%.I. If this is a true tax lease, decide if the firm should buy or lease the sewing machine. Show all your calculations (including the lease equivalent loan) and explain your decision.II. If this were a non-tax lease, should the firm buy or lease the sewing machine?Show all your calculations and explain your decision.