Starbucks can either rent or buy Espresso Machines. Renting cost is $10,000 per year (including maintenance). Purchasing cost is $30,000 at year 0 and for all the following years, an additional $2,500 annual maintenance fee needs to be paid starting from year 1.

The discount rate is 7% annually and the tax rate is 25%. Assume a forklift has a 5-year lifespan and will be depreciated using the straight-line method over that period (from year 1 to year 5).

What is the Free Cash Flow per year of renting the espresso machines? A. -$5,833 B. -$7,500 C. $7,500 D. $5,833

What is the Free Cash Flow at year 0 when buying the espresso machines? A. -$22,500 B. -$30,000 C. $0 D. $-2,500

What is the Free Cash Flow per year from year 1 to year 5 when buying the espresso machines? A. -$1,875 B. -$3,375 C. -$3,875 D. -$375

Considering all the Free Cash Flows from year 0 to year 5, should V&A Cafe rent or buy espresso machines?