You are the Chief Pilot for Aurora Medical Supplies, a Fortune 100 company. Aurora operates (owns) two Citation Bravos, primarily for in house executive travel, but also for potential customers. Don Richardson, CEO Aurora Medical Supplies, informed you that due to increases in sales, corporate travel forecasts for the next 10 years are expected to grow rapidly. He has asked you to acquire another Citation Bravo. Your assignment is to determine whether it will be better (financially) to purchase or lease (dry) the aircraft. ** Do not factor any legal implications into this assignment only financial.** Here are the details of each option: Purchase: Available for $5,000,000 You would put $1,000,000 down and finance the rest The interest rate would be 8% over a 10 year period Interest compounded monthly Aurora is responsible for all maintenance costs Estimated at $200,000 annually Residual value of aircraft after payoff is $3,500,000 Lease: Available at $45,000/month Now, you would invest your $1,000,000 (instead of down payment) in Auroras bank The bank pays Aurora 6% on all short term deposits (assume they are comfortable with this type of investment) Assume the $1,000,000 stays in bank for the entire 10 years If the lease payment is cheaper than the purchase monthly payment, you will invest that excess amount every month with the $1,000,000 Interest compounded monthly Lease company assumes some maintenance Aurora responsible for $120,000 maintenance annually Your task is to now compare each option financially over a ten year period, and make a recommendation to Mr. Richardson. Prepare a brief report to Mr. Richardson explaining your decision and the reasons behind it. Include any sources you may have used in your decision making process. Show your work for full credit (or partial credit).