Financial Option 2: Lease of $25 Million in Equipment Rationale for investment: The business's current equipment is efficient, but it uses a substantial amount of electricity. Operating the production line also creates significant waste material, including waste plastics. The business is looking into leasing newer, more environmentally friendly equipment that will still allow it to be at least as efficient in production as it is now. Assumptions to consider: Annual cash flows generated with equipment: $4 million Discount rate is 12% snhu 15-year useful life No salvage value . Net Present Value (NPV) Calculator Building Year 1 2 3 3 4 6 7 8 9 10 $0 $ $0 Initial Investment Annual Cash Inflows Discount Rate Number of Years Salvage Value Cash Flows Year NPV = $0 11 $0 $0 5 $0 15 $0 $0 12 $0 $ $0 14 $0 13 $0 16 $0 $0 17 $0 $0 18 $0 $ $0 19 $0 20 Cash Flows $0 $0 Equipment 4 Initial Investment Annual Cash Inflows Discount Rate Number of Years Salvage Value Year Cash Flows Year 8 $0 1 $0 11 $0 2 2 $0 12 $0 $ 3 3 $0 13 5 5 $0 15 $0 $ 6 $0 16 $ol $ $0 14 $0 7 $0 17 $0 9 $0 19 $0 10 $0 20 $0 NPV = $0 18 $0 $ Cash Flows $0 0 Bonds Formula Bar Initial Investment Annual Cash Inflows Discount Rate Number of Years Principal Returned NPV = $0 2 5 6 8 9 10 Year Cash Flows 3 $ol $ 4 $0 $ $0 $0 $0 $0 $ $0 $0 $0 $0