Leonard Motors is trying to increase its international export business. It is considering several alternatives. The three options along with their associated cash flows are listed below. Options: 01: Equipment costs $900K now and another $560K in 2 years. Annual M&O costs $79,000. Life of project is 10 years. 02: Subcontract production for an annual payment of $280K for years 0 (now) through 10. 03: Pay $400K now. Annual expenses exceed annual revenue starting at EOY 1 by $420K and increase 5% per year through EOY 5. Annual revenues exceed annual expenses by $50K from EOY 6 to 10. There is a salvage value of $100K at EOY 10. Please calculate your answer to the nearest whole dollar. Format 0000 No commas The MARR for Leonard Motors is 15% APR compounded quarterly. a. Which option is most financially beneficial to Leonard Motors? O A. Option 2 O B. Option 3 O C. Option 1 b. Based on part a, what is the PW of the most financially beneficial to Leonard Motors? $

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