Agrani Ltd. is in the business of manufacturing bearings. Some more product lines are being planned to be added to the existing system. The machinery required may be bought or may be taken on lease. The cost of the machine is Rs 40,00,000 having a useful life of 5 years with the salvage value of Rs 8,00,000. The full purchase value of the machine can be financed by a 20% loan repayable in 5 equal installments due at the end of each year. Alternatively, the machine can be procured on a 5-year lease, year-end lease rentals being Rs 12,00,000 p.a. The company follows the WDV method of Depreciation @ 25%. The company's tax rate is 35%, and the cost of capital is 16%: i. Advise the company which option it should choose - lease or borrow. ii. Assess the proposal from the lessor's point of view examining whether leasing the machine is financially viable @ 14% cost of capital.