Expansion of Kate Winslets businessOn September $1,1998,$ Kate Winslet started a new business with the capital of $$10,000.$ Now, she wants to expand her business. For this purpose she needs to buy or lease one machine.Option to buy: You must decide whether or not to purchase new capital equipment. The cost of the machine is $$5,000.$ It will produce the following cash flows. The appropriate discount rate is $10$ percent.Year Cash Flow$1$ $ $700290031,00041,00051,00061,00071,25081,375$Option to lease: She is considering leasing equipment where she has to pay $$1,200$ for the next $10$ years each year. This lease amount will provide at the beginning of each year.Considering all the aspect, should she purchase the equipment or should go for the lease?Expansion of Kate Winslet's business

On September $1,1998,$ Kate Winslet started a new business with the capital of $$10,000.$

Now, she wants to expand her business. For this purpose she needs to buy or lease one

machine.

Option to buy: You must decide whether or not to purchase new capital equipment. The

cost of the machine is $$5,000.$ It will produce the following cash flows. The appropriate

discount rate is $10$ percent.

Option to lease: She is considering leasing equipment where she has to pay $$1,200$ for

the next $10$ years each year. This lease amount will provide at the beginning of each

year.

Considering all the aspect, should she purchase the equipment or should go for the

lease?