Please do assignment before the deadline.

Question 1) A precision lathe costs $26,000 to buy (in year 0) and will cost $36,000 a year to operate and maintain (year 1 to year 5). If the discount rate is 10% and the lathe will only last for 5 years, what is the equivalent annual cost of the tool? (2 points) - $36,000 $26,000 $42,859 $41,201 (Hint: see the two machines example we calculated in class.) Question 2) A firm can lease a truck for 4 years at a cost of $30,000 annually. It can instead buy a truck at a cost of $80,000 (in year 0), with annual maintenance expenses of $10,000 (year 1 to year 4). The machine lasts four years. The discount rate is 10%. Is it better to lease instead of buying the machine? (2 points) (Hint: the calculation is similar to the last question and the Machine A/B example in class. The only difference is that you don't need to calculate EAC for the lease option - it's $30,000 annually.) Question 3) Use the Winnebago (WGO) Income Statement and the additional information below on operating, investment, and financing activities to create a Cashflow Statement for Winnebago. (6 points) WGO Statement of Cash Flows (year end 2006) Net Income Non-cash expenses + Depreciation Changes in Current Assets A/R= -20,051 Inv= -43,574 Other= 393 Changes in Current Liabilities A/P= -6,737 Other= 1,381 Cash Flow from Operations Cash Flow for New Investments Cash Flow from New Financing Net Change in Cash Position Changes in Balance Sheet Accounts between 2005 & 2006 Operating Activities (Numbers are all in thousands.) Accounts Receivable decreased by 20,051 Inventory decreased by 43,574 Other Current Assets increased by 393 Accounts Payable decreased by 6,737 Other Current Liabilities increased by 1,381 Investing Activities (Numbers are all in thousands.) Purchases of Fixed Assets of 4,830 Proceeds from Sale of Fixed Assets 594 Net Purchases of Short Term Investments 36,850 Reduction in Other Assets of 374 Financing Activities WGO paid 11,670 (in thousands) in cash dividends to shareholders WGO repurchased 1,846,200 shares of Common Stock @ $30.02/share