E11-7 (Algo) Deciding to Lease or Buy [LO 11+3, 11-5] Your friend Harold is trying to decide whether to buy of lease his next vehicle. He has gathered information obout each option but is not sure how to compare the altematives. Purchasing a new vehicle will cost $27,500, and Harold expects lo spend about $600 per year in maintenance costs. He would keep the vehicie for five years and estimates that the salvage value will be $10,900. Alternatively. Harold could lease the same venicle for five years at a cost of $3,575 per year, including maintenance, Assume a discoumt rote of 12 percent: Required: 1. Casculate the net present value of Harold's options. Future Value or S1. Present Value of S1, Euture Value Acpuyity of S1, Present. Value Annuisy of 51] 2. Advise Harold about which option he should choose Complete this question by entering your answers in the tabs below. Calculate the ne present value of Harold's options. (Future Value of \$1, Present Value of \$1, Future Value Annuity of \$1. Present Value Annuity of \$1.) Note: Use approprate factor(s) from the tables provided. Nogative amounts thould be indicated by a minus sign. Round your final answens to 2 decimal places. E11-7 (Algo) Deciding to Lease or Buy [LO 11.3, 11.5] Your friend Harold is trying to decide whether to buy or lease his next vehicle. He has gathered information about each option but is not sure how to compare the altematives. Purchasing a new vehicle will cost $27,500, and Harold expects to spend about $600 per year in maintenance cosis. He would keep the vehicle for five years and estimatos that the salvage value will be $10,900. Alternatively. Harold could lease the same vehicle for five years at a cost of $3.575 per year, including maintenance. Assume a discount rate of 12 percent Required: 1. Calculate the net present value of Horold's options. (Euture Volue of S1. Present Volue of $1. Euture Volue Annuify of $1. Eresent Value Annuity of 51 ) 2. Advise Harold about which option he should choose. Complete this question by entering your answers in the tabs below. Advise Harold about which option he should choose