Whispering Winds has been selling auto parts to the general public for over 70 years. It has built a reputation for outstanding customer service, becoming the third largest auto parts retailer in the Southwest. Hoping to expand its sales to other regions, managers have decided to establish an online retail presence. Dan Jennings, CIO of Whispering Winds, is charged with the task of evaluating how the company should implement this strategy. One of the first things Dan needs to determine is how to acquire the network servers the company will need. He knows the vendor he wants to use, but he is uncertain whether he should buy or lease the servers. If he buys the servers for $4,239,800, Whispering Winds will incur annual maintenance costs of $49,300 over their five-year life. If he leases the servers for five years, Whispering Winds will make lease payments of $1,183,200 in each of the first three years and of $986,000 in each of the last two years. Annual maintenance costs under the lease will be $78,880. Click here to view the factor table. (a1) Your Answer Correct Answer (Used) Calculate the present value of the purchase and lease option assuming a 12% discount rate. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answers to 0 decimal place, e.g. 58,971. If the amount is negative then enter with a negative sign preceding the number, e.g.-5,125 or parenthesis, e.g. (5,125).)) Purchase option Lease Option $ -4,417,517 $ -4,312,216 Present value (az) Your answer is correct. Which option will cost the company less to implement? Lease option e Textbook and Media Attempts: 1 of 3 used (b) What salvage value would Whispering Winds need to receive on the purchased servers at the end of year 5 so that the purchase option is essentially equal to the lease option? Assume a 12% discount rate. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 2 decimal places, e.g. 589.71.) Salvage value $