Timeline of cash flow and the present value of an annuity due. Mauer Mining Company leases a special criting press with annual payments of $130,000. The contract calls for rent payments at the beginning of each year for a minimum of 9 years. Mauer Mining can buy a similar drill for $830,000, but it will need to borrow the funds at 10% a. Show the two choices on a timeline with the cash flow b. Determine the present value of the lease payments at 10% C. Should Mauer Mining loose or buy this dit? 2. Which of the following figures correctly shows the two choices on a timeline with the cash flow? (Select the best response) A TO Ti T: T RE AA 2 $830,000 $830,000 $830,000 ...... $830,000 $830,000 Loan . TI TO ...... 7 To SI10000 UUDULIS ....DU LISUULIS SIM I . C ra T1 73 TA $130,000 $130,000 $130,000 $130,000 $130,000 Lease OD To TI T2 73 ...... 7, 1 $130,000 $130,000 $130,000 $130,000 ...... $130,000 Lease 5830,000 Loan b. What is the present value of the lease payments at 10% interest rate? $(Round to the nearest cent.) C. Should Mauer Mining lease of buy this drill? (Select the best response.) OA Mauer Mining should buy the drill since the present value of the lease payments is greater than the price of the drill B. Mauer Mining should lease the drill since the prosent value of the lease payments is greater than the price of the drill. C. Mauer Mining should buy the drill since the present value of the lease payments is less than the price of the drill. c. Should Mauer Mining lease or buy this drill? (Select the best response.) O A. Mauer Mining should but the drill since the present value of the lease payments is greater than the price of the drill. B. Mauer Mining should lease the drill since the present value of the lease payments is greater than the price of the drill. OC. Mauer Mining should buy the drill since the present value of the lease payments is less than the price of the drill. OD. Mauer Mining should lease the drill since the present value of the lease payments is less than the price of the drill