The Scenario You are a financial advisor for the Toronto-based auto mechanical salvage yard, Torauto". After cars have been in serious accidents, insurance companies sell the totaled vehicles and Torauto acquires many of them. Torauto only bids on cars in which they feel they can make a profit off of. There are 2 primary ways in which Torauto can make a profit after purchasing a totaled vehicle: 1. Fix the car themselves and then resell it. 2. Strip the car of all the working parts, then sell each of the parts individually. Upon going into work, you have been notified that there is an opportunity to potentially acquire 3 totalled vehicles. An auto-mechanical engineer at Torauto has already gone ahead and provided the following quotes for you after evaluating the vehicles: NOTE: MSRP stands for "Manufacturer's Suggested Retail Price" 2016 Subaru BRZ: MSRP: $35,305.52 Cost to purchase: $5000 Cost to fix: $8500 Total worth of salvageable parts: $12,400 2011 Lotus Evora: MSRP: $103,541.84 Cost to purchase: $10,000 Cost to fix: $19,000 Total worth of salvageable parts: $10,000 Your Task Your primary role as the financial advisor is to: 1. Determine whether it is better to: a. Purchase, fix and then resell the car for what it would be worth today. For the resale value: use the depreciation rate below and the Compound Interest formula A = P(1 - i) to determine the future value of the car today. The time, t, will be the difference between the current year and the year of the car. b. Purchase, then sell the salvageable parts. Determine an estimated profit off of each vehicle purchased (even if it is negative). Show all of your calculations and work. Provide a written statement to the company with your recommendations on whether to purchase these cars or not. Assume that cars depreciate 13% per year for the first 10 years