see attachment below. High electricity costs have made farmer........

High electricity costs have made Farmer Corporation's chicken-plucking machine economically worthless. Only two machines are available to replace it. The International Plucking Machine (IPM) model is available only on a lease basis. The lease payments will be $70,000 for five years, due at the beginning of each year. This machine will save Farmer $20,000 per year through reductions in electricity costs. As an alternative, Farmer can purchase a more energy-efficient machine from Basic Machine Corporation (BMC) for $355,000. This machine will save $30,000 per year in electricity costs. A local bank has offered to finance the machine with a $355,000 loan. The interest rate on the loan will be 9 percent on the remaining balance and will require five annual principal payments of $71,000. Farmer has a target debt-to-asset ratio of 67 percent. Farmer is in the 30 percent tax bracket. After five years, both machines will be worthless. The machines will be depreciated on a straight-line basis. a. What is the NAL of leasing? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) NAL $ b. How much debt is displaced by this lease? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) PV $ Problem 20-18 Valuing a Right Mitsy inventory systems Inc., has announced a rights offer. The company has announced that it will take four rights to buy a new share in the offering at a subscription price of $40. At the close of business the day before the ex-rights day , the company's stock sells for $80 per share . The next morning , you notice that the stock sells for $60 per share and the rights sell for $3 each. 1- What price should the stock sell for ex-rights? Do not round intermediate calculations and your answer to 2 decimal places. Stock ex-rights ------$ ? 2- What is the value of the rights? Do not round intermediate calculations. Value of the rights --------------$ ? 3- Are the rights underpriced or overpriced? -Overpriced - Underpriced 4 What is the amount of instant profit you can make on ex rights day per new share? Do not round intermediate calculations. Instant profit ------------$