Problem 18-4 ” TUTOR CAN YOU PLEASE PLACE RESULTS ON A EXCEL SPREADSHEET, THANK YOU” Lease versus BuyBig Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply:1. The machinery falls into the MACRS 3-year class.2. Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance.3.The firm’s tax rate is 40%.4.The loan would have an interest rate of 13%.5.The lease terms call for $400,000 payments at the end of each of the next 4 years.6.Big Sky Mining has no use for the machine beyond the expiration of the lease, and the machine has an estimated residual value of $250,000 at the end of the 4th year.A) What is the present value cost of ownership? Round your answer to the nearest cent.$________ B) What is the present value cost of leasing? Round your answer to the nearest cent.$________ C) What is the NAL of the lease? Round your answer to the nearest cent.$________

Cost of owingYearAfter tax loan paymentsDepreciation tax savingResiual valueTax on residualNet cash flowsPV cost of owning 0 1-$135,000.00$198,000.00 2-$135,000.00$270,000.00 3…