QUESTION 2(Continued) Alternative solution NPV=$7700(s1050PVFA3)-(86050PVIE2os. 7700(10506.24S6050k0.46B $7700$64032s2801 NPV is positive, therefore the firm should LEase Another alternative solution NPVPurchas = -$8 5000+(S 25 5OPVIF A, 08. 1)+(s PViFo $8500($2550k6.71+(3500k0.46 $85000+S171H$1621 66268 NPVease=-$7700(S770OPVIF Ao =-$700(S7700×6.24y =-$7700$4802 $5s02 Choose to LEASE(better off by $10 466)September 2003 QUESTION 2 (Continued) Alternative Solution ( ) ( ) ( ) ( ) - $10467 $77300- $64032- $ 2801 $77300- $10250 6 .2 4 7- $ 6050 0 .4 6 3 NP V $77300- $10250 P VIF A0. 08, 9- $ 6050 P VIF0. 08, 10 = = =   =   NPV is positive, therefore the firm should LEASE. Another Alternative Solution ( ) ( ) ( ) ( ) - $ 6 62 6 8 - $ 8 50 0 0 $ 1 71 1 1 $ 16 2 1 - $ 8 50 0 0 $ 25 5 0 6 .7 1 0 $ 35 0 0 0 .4 6 3 NP VPur c ha s e - $ 8 50 0 0 $ 25 5 0 P VIF A0. 0 8, 10 $ 35 0 0 P VIF0. 0 8, 10 = = + + = +  +  = +  +  ( ) ( ) - $ 5 58 0 2 - $ 77 0 0- $ 4 81 0 2 - $ 77 0 0- $ 77 0 0 6 .2 4 7 NP VLe a s e - $ 77 0 0- $ 77 0 0 P VIF A0 . 0 8 , 9 = = =  =  Choose to LEASE (better off by $10 466)