A manufacturer can lease a machine for $8$ years at $$2,720$ per quarter, payable at the

beginning of each quarter.

Alternatively, they can purchase the machine for $$65,000$ and sell it for $$7,400$ in $8$ years.

The cost of capital is $11\mathrm{.}7\%$ compounded annually.

a$.$ What is the present value of the cost:

$($enter a positive value accurate to the nearest dollar$)$

i$)$ of the lease option? $

ii$)$ of the purchase option? $

b$.$ Should the manufacturer purchase or lease?

Lease since Lease PV is higher than Purchase PV

Purchase since Lease PV is lower than Purchase PV

Purchase since Lease PV is higher than Purchase PV

Lease since Purchase PV is lower than Lease PV

Lease since Purchase PV is higher than Lease PV

Purchase since Purchase PV is higher than Lease PV