b. Show the general condition that wiit the negative of the value to the lested parties? MINICASE The Decision to Lease or Buy at Warf Computers war computers has decided to proceed with the manufacture and distribution of the virtual keybord (hint for the production of the microphone for the keyboard. Because of the required sensitain Nick Warf, the company president, has found a vendor for the equipment. Clapton Acoustical Equipment of the rapid development of new technology the equipment at a price of $71 million. Because of . At the end of four years, the market value of the equipment is expected to be $860,000 ate of 45 . Alternatively, the combal payments of $1.86 million due at the bendrix Leasing. The lease contract calls for four annual make a security deposit of $440,000 that will be returned year. Additionally. Warf computers must can issue bonds with a yield of 11%, and the company has a when the lease expires. Questions 1. Should Warf buy or lease the equipment? 2. Nick mentions to James Hendrix, the president of Hendrix Leasing, that although the company will need the equipment for four years, he would like a lease contract for two years instead. At the end of the two years, the lease could be renewed. Nick would also like to eliminate the security deposit, but he would be willing to increase the lease payments to $3.0 million for each of the two years. When the lease is renewed in two years. Hendrix would consider the increased lease payments in the first two years when calculating the terms of the renewal. The equipment is expected to have a market value of $2.1 million in two years. What is the NAL of the lease contract under these terms? Why might Nick prefer this lease? What are the potential ethical issues concerning the new lease terms