QUESTION 9 Dink Co is a small company that is finding it difficult to raise funds to acquire a new machine costing $750,000. Dink Co would ideally like a 4-year loan for the full purchase price at interest rate of 6% per year. The machine would have an expected life of four years. At the end of this period the machine would have a residual (scrap) value of $50,000. A leasing company has offered a contract whereby Dink Co could have use of the new machine for four years in exchange for an annual lease rental payment of $200,000, payable at the start of each year. The contract states that the leasing company would undertake maintenance of the machine at no additional cost to Dink Co. At the end of four years the leasing company would remove the machine from the manufacturing facility of Dink Co. Indicate the proper Discount Factor and find the PV for each type of cash flow (5 marks) Periods Discount Factor @5% PV YO Y1 Y2 13 Y4 CES Initial Investment 750 000 CF1 156250 CF2 42188 CF3 31641 CF4 79922 Scrap 50000 Arial 3 (12pt) . 5