Question 1 Problem Set #1 Use the following information to answer the next nine questions: Beryl's Iced Tea currently leases a bottling machine for $77,500 per year, including all maintenance expenses. It is considering purchasing a machine instead and is considering two options: 4 Purchase the machine it is currently leases for $225,000. This machine will require $25,000 per year in ongoing maintenance expenses. be spent upfront in training the operators of the new machine. Purchase a new, more advanced machine for $300,000. This machine will require $30,000 per year in ongoing maintenance expenses and will lower bottling costs by $30,000 per year. Also $40,000 will Suppose the appropriate discount rate is 15% per year and the machine is purchased today. Maintenance, bottling costs, and leasing payments are paid at the end of each year. Assume that the machines will be depreciated via the straight-line method over the entire ten-year life with a negligible salvage value. Beryl's marginal corporate tax rate is 20%. Question #1: The operating cash flows for leasing the current bottling machine in years 1 - 10 are closest to? O-77,500 O-93,000 -62,000 5 pts -65,875 O -50,375

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