8. (Sunk costs) A young couple has made a nonrefundable deposit of the first month's rent (equal to $1,000 ) on a 6 -month apartment lease. The next day they find a different apartment that they like just as well, but its monthly rent is only $900. They plan to be in the apartment only 6 months. Should they switch to the new apartment? What if they plan to stay 1 year? Assume an interest rate of 12%. 9. (Shortcut) Gavin Jones is inquisitive and determined to learn both the theory and the application of investment theory. He pressed the tree farmer for additional information and learned that it was possible to delay cutting the trees of Example 2.4 for another year. The farmer said that, from a present value perspective, it was not worthwhile to do so. Gavin instantly deduced that the revenue obtained must be less than x. What is x ? 10. (Copy machines ) Two copy machines are available. Both have useful lives of 5 years. One machine can be either leased or purchased outright: the other must be purchased. Hence there are a total of three options: A. B, and C. The details are shown in Table 2.5 . (The first year's maintenance is included in the initial cost. There are then four additional maintenance payments, occurring at the beginning of each year, followed by revenues from resale.) The present values of the expenses of these three options using a 10% interest rate are also indicated in the table. According to a present value analysis, the machine of least cost, as measured by the present value, should be selected; that is, option B