In March 2013 Arco Corporation decides to acquire some heavyequipment (this is i

In March 2013 Arco Corporation decides to acquire some heavyequipment (this is in addition to the $2500000 in equipmentpurchased in January of this year). The new equipment is 7-yearclass property but Arco expects that it will be able to use theequipment for 8 years. It could purchase the equipment for $120000cash and at the end of 8 years it would have no salvage value.Alternatively Arco could lease the equipment for 8 years for$22000 annually. Arco is in the 35 percent marginal tax bracketand uses a 6 percent discount rate for evaluation. Should Arcopurchase or lease the equipment? Prepare a schedule showing yourcalculations to support your recommendation.