Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,250,000 if purchased today. It will generate the following cash disbursements and receipts. 1) Should Duncombe pursue the investment if the interest rate for the capital is 8% ? Why? (1pt) 2) What is the internal rate of retum of this project? (1pt) Excel Template: PS6 Q2-1.x/5 Question 3 The Old School is trying to decide whether it should purchase or lease a new high-speed photocopier machine. It will cost the school $14,000 to purchase the copier and $750 each year to maintain the machine over the course of its 6 -year useful life. At the end of the sixth year, Old School expects to be able to sell the copier for $1,000. A dealer has offered to lease the school the same copier for a payment of $750 at the beginning of the lease plus lease payments of $3,450 per year for 4 years. Lease payments include all maintenance. The dealer was unable to offer a least longer than four years. Lease payments would be made at the end of each year. If Oid School's discount rate is 8%, which alternative should it choose and why? (2pts) Excel Template: PS6 Q3.x/s PROBLEM 5-34 SOLUTION (NPV Problem) INPUT DATA Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,250,000 if purchased today. It will generate the following cash disbursements and receipts. 1) Should Duncombe pursue the investment if the interest rate for the capital is 8% ? Why? (1pt) 2) What is the internal rate of retum of this project? (1pt) Excel Template: PS6 Q2-1.x/5 Question 3 The Old School is trying to decide whether it should purchase or lease a new high-speed photocopier machine. It will cost the school $14,000 to purchase the copier and $750 each year to maintain the machine over the course of its 6 -year useful life. At the end of the sixth year, Old School expects to be able to sell the copier for $1,000. A dealer has offered to lease the school the same copier for a payment of $750 at the beginning of the lease plus lease payments of $3,450 per year for 4 years. Lease payments include all maintenance. The dealer was unable to offer a least longer than four years. Lease payments would be made at the end of each year. If Oid School's discount rate is 8%, which alternative should it choose and why? (2pts) Excel Template: PS6 Q3.x/s PROBLEM 5-34 SOLUTION (NPV Problem) INPUT DATA