Hello, I need help with each of the questions below. Any help you can provide is greatly appreciated!

Part Ten

(NPV)

Memories, Inc. currently leases its equipment from Quality Materials, Inc. for $2,500 per month. Five years remain on the lease. MI may terminate the Quality Materials lease at any time by paying a cash penalty of $10,000 to Quality Materials. They are considering purchasing the equipment from Super Materials, Inc. to replace the leased equipment. MI must purchase 10 units of each piece of equipment. Memories, Inc. can purchase equipment at the following prices:

Equipment	Price per unit
Heater	$ 2,100
Injection molder	$ 5,450
Sealer	$ 4,100
Cardboard cutter	$ 2,695
Label installer	$ 1,000

If MI elects to purchase new equipment, it will no longer need to retain the Quality Materials leased equipment. [Hint: Carefully consider and calculate allof the costs to MI if it elects to purchase new equipment.]

Required:

Using NPV analysis, compare the present value of the Quality Materials lease payments with the cost of buying the Super Materials equipment, with that acquisition cost being paid in a lump sum upon purchase. Assume a discount rate of 12 percent per annum (ignore tax.) Which option is preferable? [Reminder: The payments on the Quality Materials lease are paid month but the applicable discount rate is quoted as an annual rate. Adjust your formula accordinglythis is VERY important.]

Query: What is the total cost to MI if it elects to go with the Super Materials option? $_______________

Query: What is proper the per period discount rate you should be using in this computation? ______% per period.

Query: How many periods should you be using in this computation? ____ periods.

Totally unrelated to Part A, MI also has the option of purchasing equipment from Acme Materials at a total cost of $190,000. Acme promises that the new equipment will reduce operating costs by $1,000 per month over the life of the equipment. Assume a 12 percent per annum discount rate (ignore tax.) Which option is preferable? [Reminder: Like B above, the savings is quoted as a monthly savings amount but the applicable discount rate is quoted as an annual rate. Adjust your formula accordingly-again, this is VERY important.]

Calculate the after-tax NPV for each of the three (3) options in A and B assuming a 30 percent tax rate. If purchased from either vendor, all equipment will be depreciated over five years, using straight-line depreciation, and will have no salvage value. Which of the three options is preferable now? (Three options: (A) Continue the Quality Lease, (B) Purchase new equipment from Super Materials, or (C) Purchase new equipment from Acme Materials for $190,000).

What factors other than cost savings should MI consider in these decisions?