Kiddy Toy Corporation needs to acquire the use of a machine to be used in its manufacturing process. The machine needed is manufactured by Lollie Corp. The machine can be used for 10 years and then sold for $19,000 at the end of its useful life. Lollie has presented Kiddy with the following options: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Buy machine. The machine could be purchased for $169,000 in cash. All insurance costs, which approximate $14,000 per year, would be paid by Kiddy. 2. Lease machine. The machine could be leased for a 10-year period for an annual lease payment of $34,000 with the first payment due immediately. All insurance costs will be paid for by the Lollie Corp. and the machine will revert back to Lollie at the end of the 10-year period. Required: Assuming that a 8% interest rate properly reflects the time value of money in this situation and that all maintenance and insurance costs are paid at the end of each year, determine which option Kiddy should choose. Ignore income tax considerations. (Negative amounts should be indicated by a minus sign. Round your final answers to nearest whole dollar amount.)

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PV Buy option Lease option Kiddy should choose The graph below shows present values and future values of single payments for various interest rates over six periods. Answer the following questions. Future Value and Present Value of a Single Payment $3,500 Future Values $3,000 $2,986 $2,500 $2,000 $1,772 $1,500 Present Values $1,340 $1,000 $1,126 $1,000 $500 $0 n = 0 1 2. 3 4. 5 6 2% 5% 10% 20% Click here to open the graph(s) in a new tab. Required: Today (n = 0), a company invests $1,000 and expects that investment to grow 10% each period for the next six periods (n = 6). What is the investment's 1. expected future value? 2. A company expects to receive $1,772 in six periods. What is that amount's present value, assuming the company's other current investment opportunities are expected to earn 10% per period? 3. The difference between the present value and future value for a given rate represents: 4. The difference between present value and future value: 5. The difference between present value and future value: A company has the choice of receiving $1,000 today from a customer or receiving $1,340 in six periods. 6. Which option does the company prefer, assuming the company's other current investment opportunities are expected to earn 5% per period? A company has the choice of receiving $1,000 today from a customer or receiving $1.200 in six periods. 17. Which option does the company prefer, assuming the company's other current investment opportunities are expected to earn 2% per period