The owner of the Kwik Copy franchise has reviewed the option for the outright purchase of the Photocopier and decides to get a quote on leasing a Konica Photocopier.

Goal: calculates the viability of the leasing proposal against the outright purchase option above

-Total price of the Photocopier $50,000, monthly repayments are set at $998.95 per month over 5 years

-The machine produces Photocopies at 45 per minute

-Based on the hours above include in Scenario 4 the price per Copy rates:

80% of the copy is Black and White@ 1 cent per copy

20% of the copy is Colour@ 7 cents per copy

-The annual operating expenses are included in the price per copy therefore these at $0.00

-Balloon payment of 25% at the end of 5 years

-Use the Straight-line method to calculate the estimated costs and profit of this option over 5 years When you have finished your worksheet, answer the following question.

1. Based on your calculations, which finance option is the best for this company?