4. The management of The Alexandrov Company decided to acquire the use of a machine to be used in its manufacturing process. The machine is manufactured only by Chang, Incorporated and would have a useful life of ten years. Chang's management has presented Alexandrov with the following acquisition options: Lease: The machine could be leased for an eight-year period for an annual lease payment of $60,000, with the first payment due on the date that the agreement is signed. Related annual executory costs (maintenance and insurance expenses for the machine), which are expected to be about $5,000 per year, would be paid by Alexandrov. Purchase: The machine could be purchased for $375,000 in cash. Assume that (1) Alexandrov and Chang will agree on a transaction on November 30, 2020; and (2) the current interest rate for Alexandrov's lease arrangements is 9%, but the rate applicable to annual maintenance and insurance expenses is only 6%. Using the accompanying Time Value of Money tables, prepare a schedule showing the alternatives available to Alexandrov for the acquisition of the machine. Future Value of an Annuity Due mi 8.0% 7.0% 8.0% 9.0% 10.0% 12.0% 20.0% 1 1.0800 2.2484 2 1.0600 1.0700 2.1836 22149 3.3746 3.4399 4.6371 4.7507 5.9753 6.1533 3 4 5 3.5061 11.0% 1.1100 2.3421 3.7097 S.2278 6.9129 1.0900 2.2781 3.5731 4.9847 6.5233 1.1000 2.3100 3.6410 5.1051 6.7156 1.1200 2.3744 3.7793 5.3528 7.1152 1.2000 2.6400 4.3680 6.4416 8.9299 4.8666 6.3359 6 7.3938 7.4540 7 8.8975 9.2598 8. 10.4913 10.9780 9 12.1808 12.8164 10 13.9716 14.7836 7.9228 8.2004 8.4872 8.7833 9.DB90 9.6366 .10.0265 10.4359 10.8594 11.2997 11.4876 12.0210 12.5795 13.1640 13.7757 13.4866 14.1929 14.9374 15.7220 16.5487 15.6455 165603 17.5312 18.5614 19.6546 11.9159 15.4991 19.7909 24.9587 31.1504 Future Value of an Ordinary Annuity w 6.0% 7.0% B.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.0000 1.0000 1.000 1.0000 1.0000 1.0000 1.0000 1.0000 2 20600 2.0700 2.0800 2.0900 - 21000 2.1100 2.1200 2.2000 3 3.1836 3.2149 3.2464 3.2781 3.3100 3.3421 3.3744 3.6400 4 4.3746 4.4399 4.5061 4.5731 4.6410 4.7097 4.7793 5.3680 5 5.8371 5.7507 5.8888 5.9847 8.1051 6.2278 6,3528 7.4416 6 6.9753 7.1533 7.3359 7.5233 7.7156 7.9129 8.1152 9.9299 7 8.3938 8.6540 8.9225 9.2004 9.4872 9.7833 10.0890 12.9159 8 9.8975 10.2598 10.6366 11.0285 11.4359 11.8594 12 2997 16.4971 11.4913 11.9780 12.4876 13.0210 13.579 14.1640 14.1640 14.7757 14.7757 20.7989 10 12.1808 13.8164 14.4866 15.1929 15.9374 16.7220 17.5487 25.9587 Present Value of an Annuity Due w 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.00000 1.00000 100000 1.00000 1.00000 1.00000 100000 1.00000 2 1.94340 1.93458 1.92593 1.91743 1.90909 1.90090 1.89286 1.83333 3 3 283339 2.80802 2.78326 2.75911 2.73554 2.71252 2.69005 2.52778 3.67301 3.62432 3.57710 3.53129 3.48685 3.44371 3.40183 3.10648 5 4.46511 4.38721 4.312134.23972 4.16907 4.10245 4.03735 3.58873 65.21236 5.10020 4.99271 4.88965 4.79079 4.69590 4.60478 3.9981 7 5.91732 5.70 5.62288 5.48592 5.35528 5.23054 5.11141 4.32551 8 6.58238 6.38929 6.20637 6.03295 5.56842 5.71220 5.56376 4.60459 7.20979 6.97130 6.74664 6.53482 6:33493 6.14612 5.96764 4.83716 107.80162 7.51523 7.24689 6.99525 6.75902 6.53705 6.32825 5.03097 Present Value of an Ordinary Annuity / 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% % 1 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.83333 2 1.83339 1.80802 1.78326 1.75911 1.73554 1.71252 1.69005 1.52778 3 2.67301 2.62432 2.57710 2.53129 2.48685 2.44371 240183 2.10648 4 3.46511 3.38721 2.31213 3.23972 3.16987 3.10245 3.03735 2.58873 5 4.21236 4.10020 3.99771 3.88965 3.79079 3.69590 3.60478 2.99061 64.91732 476654 4.62238 4.48592 4.35526 4.230.111473.32551 7 5.58238 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 3.60459 B 6.20979 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 3.83716 9 6.80169 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.03097 10 7.36009 7.02358 8.71008 6.41766 6.14457 5.88923 5.65022 4.19247 4. The management of The Alexandrov Company decided to acquire the use of a machine to be used in its manufacturing process. The machine is manufactured only by Chang, Incorporated and would have a useful life of ten years. Chang's management has presented Alexandrov with the following acquisition options: Lease: The machine could be leased for an eight-year period for an annual lease payment of $60,000, with the first payment due on the date that the agreement is signed. Related annual executory costs (maintenance and insurance expenses for the machine), which are expected to be about $5,000 per year, would be paid by Alexandrov. Purchase: The machine could be purchased for $375,000 in cash. Assume that (1) Alexandrov and Chang will agree on a transaction on November 30, 2020; and (2) the current interest rate for Alexandrov's lease arrangements is 9%, but the rate applicable to annual maintenance and insurance expenses is only 6%. Using the accompanying Time Value of Money tables, prepare a schedule showing the alternatives available to Alexandrov for the acquisition of the machine. Future Value of an Annuity Due mi 8.0% 7.0% 8.0% 9.0% 10.0% 12.0% 20.0% 1 1.0800 2.2484 2 1.0600 1.0700 2.1836 22149 3.3746 3.4399 4.6371 4.7507 5.9753 6.1533 3 4 5 3.5061 11.0% 1.1100 2.3421 3.7097 S.2278 6.9129 1.0900 2.2781 3.5731 4.9847 6.5233 1.1000 2.3100 3.6410 5.1051 6.7156 1.1200 2.3744 3.7793 5.3528 7.1152 1.2000 2.6400 4.3680 6.4416 8.9299 4.8666 6.3359 6 7.3938 7.4540 7 8.8975 9.2598 8. 10.4913 10.9780 9 12.1808 12.8164 10 13.9716 14.7836 7.9228 8.2004 8.4872 8.7833 9.DB90 9.6366 .10.0265 10.4359 10.8594 11.2997 11.4876 12.0210 12.5795 13.1640 13.7757 13.4866 14.1929 14.9374 15.7220 16.5487 15.6455 165603 17.5312 18.5614 19.6546 11.9159 15.4991 19.7909 24.9587 31.1504 Future Value of an Ordinary Annuity w 6.0% 7.0% B.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.0000 1.0000 1.000 1.0000 1.0000 1.0000 1.0000 1.0000 2 20600 2.0700 2.0800 2.0900 - 21000 2.1100 2.1200 2.2000 3 3.1836 3.2149 3.2464 3.2781 3.3100 3.3421 3.3744 3.6400 4 4.3746 4.4399 4.5061 4.5731 4.6410 4.7097 4.7793 5.3680 5 5.8371 5.7507 5.8888 5.9847 8.1051 6.2278 6,3528 7.4416 6 6.9753 7.1533 7.3359 7.5233 7.7156 7.9129 8.1152 9.9299 7 8.3938 8.6540 8.9225 9.2004 9.4872 9.7833 10.0890 12.9159 8 9.8975 10.2598 10.6366 11.0285 11.4359 11.8594 12 2997 16.4971 11.4913 11.9780 12.4876 13.0210 13.579 14.1640 14.1640 14.7757 14.7757 20.7989 10 12.1808 13.8164 14.4866 15.1929 15.9374 16.7220 17.5487 25.9587 Present Value of an Annuity Due w 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.00000 1.00000 100000 1.00000 1.00000 1.00000 100000 1.00000 2 1.94340 1.93458 1.92593 1.91743 1.90909 1.90090 1.89286 1.83333 3 3 283339 2.80802 2.78326 2.75911 2.73554 2.71252 2.69005 2.52778 3.67301 3.62432 3.57710 3.53129 3.48685 3.44371 3.40183 3.10648 5 4.46511 4.38721 4.312134.23972 4.16907 4.10245 4.03735 3.58873 65.21236 5.10020 4.99271 4.88965 4.79079 4.69590 4.60478 3.9981 7 5.91732 5.70 5.62288 5.48592 5.35528 5.23054 5.11141 4.32551 8 6.58238 6.38929 6.20637 6.03295 5.56842 5.71220 5.56376 4.60459 7.20979 6.97130 6.74664 6.53482 6:33493 6.14612 5.96764 4.83716 107.80162 7.51523 7.24689 6.99525 6.75902 6.53705 6.32825 5.03097 Present Value of an Ordinary Annuity / 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% % 1 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.83333 2 1.83339 1.80802 1.78326 1.75911 1.73554 1.71252 1.69005 1.52778 3 2.67301 2.62432 2.57710 2.53129 2.48685 2.44371 240183 2.10648 4 3.46511 3.38721 2.31213 3.23972 3.16987 3.10245 3.03735 2.58873 5 4.21236 4.10020 3.99771 3.88965 3.79079 3.69590 3.60478 2.99061 64.91732 476654 4.62238 4.48592 4.35526 4.230.111473.32551 7 5.58238 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 3.60459 B 6.20979 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 3.83716 9 6.80169 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.03097 10 7.36009 7.02358 8.71008 6.41766 6.14457 5.88923 5.65022 4.19247