Click to see additional instructions Knowles College recently constructed a new academic building and is deciding whether it should purchase or lease the media equipment for its classrooms. If the College purchases the equipment, it will cost $175,000. In addition to the upfront cost, the equipment will require $20,000 in maintenance at the end of years 1, 3, and 5. The useful life of the equipment is estimated to be 6 years, at which point the College estimates it will be able to sell the equipment for $12,000. If the College chooses to lease the equipment, it will be required to make annual payments of $40,000. The lease requires that payments be made at the beginning of each year for the duration of the lease, which is 6 years. The College uses a discount rate of 4%. Fill in the following blanks: [Note: Write only POSITIVE numbers e.g. even if Excel gives you -253 or (253), write 253. Also, round your numbers to TWO decimal places e.g. 253.12] A) Present value of the purchase option is: $ B) Present value of the lease option is: $ [Write 1 if "Purchase", c) Which option should Knowles College choose? or 2 if "Lease"] D) If the lease payments were instead due at the end of the year rather than the beginning, does the lease option become more or less attractive (ignoring the option to buy)? [Write 1 if More, 2 if Less, 3 if the Same]