Attached are the two problems .

Question -1 Please show your work by submitting a Word or Excel file in the INFORMATION OLD MACHINE: Original Purchase Price Original Life Remaining Life Straight line depreciation in use Salvage Value Current Fair Market Value INFORMATION NEW MACHINE A: Purchase Price Estimated Life Use Straight Line Depreciation Method Estimated Salvage Value $ 550,000.00 10 YEARS 5 YEARS $ 50,000.00 $ 260,000.00 $895,000.00 5 YEARS $ 10,000.00 Estimated Net Operating Cash Flow Increase/Decrease (Prior to Depreciation and Taxes) End of Year 1 End of Year 2 End of Year 3 End of Year 4 End of Year 5 ASSUMPTIONS: Tax Rate WACC Rate 1. Calculate the NPV if you keep the old machine. $ 100,000.00 $ 150,000.00 $ 250,000.00 $ 200,000.00 $ 200,000.00 40% 7% 2. Calculate the NPV if you sell the old machine and buy new machine A. Question #2 LEASE vs PURCHASE Please show your work by submitting a Word or Excel file LEASE FACTS: Down Payment Lease Term Lease Payments $ 1,500.00 36 $ 189.00 Buy Out Price $ 12,000.00 Market Loan Rate Sales Tax Title Fee $ 15.00 Allowed Miles Overage Miles Fee Excess Wear & Tear Fee Applies 1. Months Per Month 8% 6.75% 36,000 $ 0.15 Assume that you can buy the vehicle for $17,000 before tax and title. What is the NPV of the car if you lease? What is the NPV of the car if you buy it? 2. Miles Per Mile Explain to me the relationship between the NPV of the lease versus the outright purchase. What does it mean? Is the lease a good value compared to buying outright? 3. For the following questions, assume that the lease and buy are both reasonable values and that you are paying a 15% interest rate (after tax) on credit card debt. You also plan to keep the vehicle beyond the lease term. In other words, you would exercise the purchase option at the end of the lease term. a) Assume for this question that you take advantage of the opportunity to pay off credit card debt with the monthly lease savings. What is the NPV of the lease? What is the NPV of buying it outright? b). Assume for this questions that you do not take advantage of the opportunity to pay off credit card debt with the monthly lease savings. What is the NPV of the lease? What is the NPV of buying it outright? Question -1 Please show your work by submitting a Word or Excel file in the INFORMATION OLD MACHINE: Original Purchase Price Original Life Remaining Life Straight line depreciation in use Salvage Value Current Fair Market Value INFORMATION NEW MACHINE A: Purchase Price Estimated Life Use Straight Line Depreciation Method Estimated Salvage Value $ 550,000.00 10 YEARS 5 YEARS $ 50,000.00 $ 260,000.00 $895,000.00 5 YEARS $ 10,000.00 Estimated Net Operating Cash Flow Increase/Decrease (Prior to Depreciation and Taxes) End of Year 1 End of Year 2 End of Year 3 End of Year 4 End of Year 5 ASSUMPTIONS: Tax Rate WACC Rate 1. Calculate the NPV if you keep the old machine. $ 100,000.00 $ 150,000.00 $ 250,000.00 $ 200,000.00 $ 200,000.00 40% 7% 2. Calculate the NPV if you sell the old machine and buy new machine A. Question #2 LEASE vs PURCHASE Please show your work by submitting a Word or Excel file LEASE FACTS: Down Payment Lease Term Lease Payments $ 1,500.00 36 $ 189.00 Buy Out Price $ 12,000.00 Market Loan Rate Sales Tax Title Fee $ 15.00 Allowed Miles Overage Miles Fee Excess Wear & Tear Fee Applies 1. Months Per Month 8% 6.75% 36,000 $ 0.15 Assume that you can buy the vehicle for $17,000 before tax and title. What is the NPV of the car if you lease? What is the NPV of the car if you buy it? 2. Miles Per Mile Explain to me the relationship between the NPV of the lease versus the outright purchase. What does it mean? Is the lease a good value compared to buying outright? 3. For the following questions, assume that the lease and buy are both reasonable values and that you are paying a 15% interest rate (after tax) on credit card debt. You also plan to keep the vehicle beyond the lease term. In other words, you would exercise the purchase option at the end of the lease term. a) Assume for this question that you take advantage of the opportunity to pay off credit card debt with the monthly lease savings. What is the NPV of the lease? What is the NPV of buying it outright? b). Assume for this questions that you do not take advantage of the opportunity to pay off credit card debt with the monthly lease savings. What is the NPV of the lease? What is the NPV of buying it outright