Question 5 0/1 point bo Happy Rock Corporation needs manufacturing tools for production during the next three years. In order to buy the tools, the firm can borrow the purchase price of $4.800,000 at a 10% rate. The purchase price of the tools would be depreciated on a straight-line basis, and annual maintenance costs associated with ownership are estimated to be $240,000. However, a planned change in the firm's production technology will make the tools obsolete after three years, and so Happy Rock is considering a leasing arrangement to finance them instead. Under a lease arrangement, the company can make three equal beginning-of-year lease payments of $2,100,000, and the lessor will be responsible for annual mainten.ance expenses. Assume Happy Rack's marginal tax rate is 40%. What is the maximum lease payment Happy Rock should be wiling to pay? n $000ight ne b $2,043,596 $2,110,394 $2,199402 $1,993,538 Question 0/1 point Two firms, Cruella Inc. and Morticia Corporation, are considering the installation of an automated sun-blocking system in their respective headquarters. The system costs $10,000,000, and both firms would depreciate on a straight-line basis to a zero salvage value over an expected 5-year life. The expected salvage value on the system is $500,000 at the end of year 5. It is the policy of each firm to discount salvage values at their respected WACCs. If the firms purchase the system, the annual maintenance expenses are expected to be $125.000. Alternatively, the system can be leased for $2,650,000 due at the beginning of each year, and the lessor would be responsible for maintenance costs. Although the two firms have similar sun-blocking needs, their financial conditions differ significantly. Cruela has had difficulties recently and therefore has a 0% effective tax rate, an annual cost of borrowing of 16%, and a WACC of 19.5%. Morticia is highly profitable, and therefore has a marginal tax rate of 40%, an annual cost of borrowing of 12%, and a WACC of 15%. Compute the NAL for each firm. Cruella $143,493; Morticia $(59383 Cruella $143,493; Morticia $(56,427) Cruella $138,930; Morticia $(57,384) Cruella $138,930; Morticia $(58,472)