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Question 1 of 7 0.5/1 E View Policies Show Attempt History Current Attempt in Progress Carla Excavating Inc. is purchasing a bulldozer. The equipment has a price of $96,700. The manufacturer has offered a payment plan that would allow Carla to make 10 equal annual payments of $17.080.00 with the first payment due one year after the purchase. (a) Your answer is correct. How much total interest will Carla pay on this payment plan? (Round answer to decimal places, es. 458,581.) Total interest $ 74100 e Textbook and Media (b) Carla could borrow $96,700 from its bank to finance the purchase at an annual rate of 9%. Click here to view factor tables Should Carla borrow from the bank or use the manufacturer's payment plan to pay for the equipment? (Round factor values to 5 decimal places, eg. 1.25124 and final answer to decimal places, eg.7%) Manufacturer's rate % Use Manufacturer's Payment Plan Borrow from the Bank eTextDOOK GT veula Question 3 of 7 -/1 View Policies Current Attempt in Progress Morgan Long has just learned he has won a $500,600 prize in the lottery. The lottery has given him two options for receiving the payments. (1) If Morgan takes all the money today, the state and federal governments will deduct taxes at a rate of 46% immediately. (2) Alternatively, the lottery offers Morgan a payout of 20 equal payments of $39,200 with the first payment occurring when Morgan turns in the winning ticket. Morgan will be taxed on each of these payments at a rate of 26%. Click here to view factor tables Compute the present value of the cash flows for lump sum payout. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to decimal places, e.g. 458,581.) Lump sum payout $ Assuming Morgan can earn an 10% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to decimal places, eg. 458,581) Present value of annuity payout $ Which pay-out option should he choose? Lump Sum Payout Annuity Payout

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