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1) The following are the cash flows of two projects: fAnnual operating cash ow in year 0 Annual operating cash flow in years 1 to

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1) The following are the cash flows of two projects:

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\fAnnual operating cash ow in year 0 Annual operating cash flow in years 1 to 6 a. Present value of lease b. Is it cheaper to buy or lease? C. Present value of lease d. Is it now cheaper to buy or lease?INCOME STATEMENT Depreciation Pretax profit Rental costs Revenue Taxes Variable costs\fMethods of Calculation Operating Cash Flow Dollars in Minus Dollars Out ii. Adjusted Accounting profits iii. After tax Operating Cash flowa. Present value million b. Is the property investment attractive to you? c-1. Present value million C-2. Is the property investment attractive to you now?

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