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Guzman Trucking Company needs to acquire a new machine toexpand its operations. The machine can be leased or purchased. Thefirm is in the 40% tax bracket and its after-tax cost of debt is5.4%. The terms of the lease and purchase are as follows:Lease: The leasing arrangement requires beginning of yearpayments of $16,900 over five years. The lessor assumesall maintenance costs.Purchase: If Guzman purchases the machine, the cost of $80,000,will be financed with a five-year, 9% non-amortizing loan.Maintenance costs are $3,000 per year and the machine will have aresidual value of $5,000. The machine falls into the MACRS-5category: 20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%.Which alternative—lease or purchase—do you recommend? Why?