QUESTION 3(Continued) Alternative solution NPV=S26400(53700 X VIFA20)-(s35700xPⅤH.an) 26400($53700×4.10($35700×0.665 26400$22070$2376 20B54 NPV is positive, therefore the firm should LEASE Another alternative solution NPVpurchas=-$ 30000+(S 1 VIF A,.7) =-S30000+(180004.10 -S30⑩00+$7300 s22600 NPV s35700(35700 P VIFA2 S35700-(S35700476 35700$17082 20882 Choose to LEASE(better off by $20 318)September 2003 QUESTION 3 (Continued) Alternative Solution ( ) ( ) ( ) ( ) $ 2 03 5 4 $ 2 6 43 0 0- $ 2 2 01 7 0- $ 2 37 7 6 $ 2 6 43 0 0- $ 5 37 0 0 4 .1 0 0- $ 3 57 0 0 0 .6 6 6 NP V $ 2 6 43 0 0- $ 5 37 0 0 P VIF A0. 0 7, 5 - $ 3 57 0 0 P VIF0. 0 7, 6 = = =   =   NPV is positive, therefore the firm should LEASE. Another Alternative Solution ( ) ( ) - $226200 - $300000 $73800 - $300000 $18000 4 .1 0 0 NP VPur c ha s e - $300000 $18000 P VIF A0. 07, 5 = = + = +  = +  ( ) ( ) - $ 2 0 5882 - $35700- $ 1 7 0182 - $35700- $35700 4 .7 6 7 NP VLe a s e - $35700- $35700 P VIF A0. 07, 6 = = =  =  Choose to LEASE (better off by $20 318)