Name 1) The college of Staten Island company must decide between two mutually exclusive industrial printers. The cost of each printer is $6,750, and each has an expected life of 3 years. Annual projected cash flows for each printer are as follows: Project A Project B Probability Cash Flow Probability Cash flow 6,000 20% 6096 6,750 60% 6,750 209 2,500 20% 18,000 20% The college of Staten Island has decided to evaluate the riskier project at 12% and the less ciskie project at 10%. Project A Project B What is the expected cash flow for each project? What is the standard deviation for each project? What is the coefficient of variation for each project? What is the NPV for each project? 2) The CSI Company must install $1.5 million of new machinery in its Staten Island site. It can obtain a bank loan for 100% of the required amount. Alternatively, a Staten Island investment banking firm that represents a group of investors believes that it can arrange for a lease financing plan. Assume that the following facts apply: The equipment falls in the MACRS 3-year class. The applicable MACRS rates are 33%, 45%, 15%, and 7%. Estimated maintenance expenses are $75,000 per year. The company's tax rate is 4096 If the money is borrowed, the bank loan will be at a rate of 15%, amortized in 4 equal installments to be paid at the end of each year. The tentative lease terms call for end-of-year payments of $400,000 per year for 4 years. Under the proposed lease terms, the lessee must pay for insurance, property taxes, and maintenance. The equipment has an estimated salvage value of $400,000, which is the expected market value after 4 years, at which time Morris-Meyer plans to replace the equipment regardless of whether the firm leases or purchases it. The best estimate for the salvage value is $400,000, but it may be much higher or lower under certain circumstances. To assist management in making the proper lease-versus-buy decision, you are asked to answer the following questions. a. Assuming that the lease can be arranged, should Morris-Meyer lease or borrow and buy the equipment? Explain