1 Problem 5-1 (Static) Analysis of alternatives (LO5-3, 5-8) 10 points Bock Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following (FV of $1. PV. OS1. EVA of S1 PVA of SI. FVAD of $1 and PVAD of 1 (Use appropriate factor(s) from the tables provided.) Machine A could be purchased for $48,000. It will last 10 years with annual maintenance costs of $1.000 per your After 10 years the machine can be sold for $5,000 Machine B could be purchased for $40,000. Bolso will last 10 years and will require maintenance costs of $4,000 in year three $5,000 in year six, and $6,000 in year eight After 10 years, the machine will have no salvage value Required: Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year Ignore income tax considerations Calculate the present value of Machine A & Machine B, which machine Esquire should purchase? (Negative amounts should be Indicated by a minus sign. Do not round Intermediate calculations, Round your final answers to the nearest whole dollar amount.) Print PV Machine A Machine B Enquire should purchase Machine 9 10 Dans Sword Problem 5-13 (Static) Lease vs. buy alternatives (LO5-3,5-8, 5-10) Kiddy Toy Corporation needs to acquire the use of a machine to be used in its manufacturing process. The machine needed is manufactured by Lollie Corp. The machine can be used for 10 years and then sold for $10,000 at the end of its useful life. Lollie has presented Kiddy with the following options (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided) 1. Buy machine. The machine could be purchased for $160,000 in cash. All insurance costs, which approximate $5,000 per year, would be paid by Kiddy 2. Lease machine. The machine could be leased for a 10-year period for an annual lease payment of $25,000 with the first payment due immediately. All Insurance costs will be paid for by the Lollie Corp, and the machine will revert back to Lollie at the end of the 10 year period 000 Print Required: Assuming that a 12% interest rate properly reflects the time value of money in this situation and that all maintenance and insurance costs are paid at the end of each year, determine which option Kiddy should choose. Ignore income tax considerations. (Negative amounts should be indicated by a minus sign. Round your final answers to nearest whole dollar amount.) PV Buy coton Lotion widey should choose