Question 4 (20 marks) (a)You are managing a construction site and you need a mobile crane to handle the daily operations There are two competing brands available in the market for purchase, with relevant details of each brand listed in the table below In addition to purchasing, you can also lease a mobile crane instead. The market leasing cost at the end of year 1 is $50,000 and it is expected to increase by 2% per year. [Assume the lease payment is made at the end of each period.] The MARR is 5% for your company Purchase Price Annual expense Useful life Market value depreciation $35,000 Crane A S350,000 $10,000 10 years Crane B $200,000 $12,000 vears ear $40,000 per year (i)Assuming repeatability, which of the purchase options is preferred? Use the easier method for comparison. (4 marks) (ii) If the annual expenses increase by $1,000 per year for both cranes and you only needa mobile crane for 7 years, calculate the present worth of ALL available options. Describe each available option for the firm within a 7-year period briefly before showing your calculations. Do not assume repeatability in any case. (16 marks) Question 4 (20 marks) (a)You are managing a construction site and you need a mobile crane to handle the daily operations There are two competing brands available in the market for purchase, with relevant details of each brand listed in the table below In addition to purchasing, you can also lease a mobile crane instead. The market leasing cost at the end of year 1 is $50,000 and it is expected to increase by 2% per year. [Assume the lease payment is made at the end of each period.] The MARR is 5% for your company Purchase Price Annual expense Useful life Market value depreciation $35,000 Crane A S350,000 $10,000 10 years Crane B $200,000 $12,000 vears ear $40,000 per year (i)Assuming repeatability, which of the purchase options is preferred? Use the easier method for comparison. (4 marks) (ii) If the annual expenses increase by $1,000 per year for both cranes and you only needa mobile crane for 7 years, calculate the present worth of ALL available options. Describe each available option for the firm within a 7-year period briefly before showing your calculations. Do not assume repeatability in any case. (16 marks)