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Question 2 (35 marks) Dr Emmett Brown Inc. has decided to acquire a time machine (instead of buleting another one). The details on this purchase
Question 2 (35 marks) Dr Emmett Brown Inc. has decided to acquire a time machine (instead of buleting another one). The details on this purchase follow Cost of time machine $ 76,000 Expected useful life of time machine in years) 7 Salvage value at end otsuite 5 10,000 Dr Brown has two options on how to finance the time machine. Cha Paimer has agreed to advance funds for the entire purchase price with the loan being payable in equal installments at the end of each year over the five years The interest rate on this toan would be 100% As an alternative, the machine could be leaned over its use ide from the manufacturer with equal annual lease payments payable at the beginning of each year . Annual lease payment 12,000 Additional information is as follows: Dr. Emmett Brown Inc s tax rate 31% CCA rate for time travel machines 30% Annual maintenance costs of Dr. Brown owns the machines 2,500 Should the machine be leased or purchased? Show all calculations
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