(15 points) Jan is considering purchasing a new car for $40,000. The dealer is offering two options on the purchase: Option 1: Receive a $5,000 rebate on the price of the car and finance the balance over 5 years at 4% interest, Option 2: Finance the vehicle for 6 years at 0% interest, but no rebate. a) What would Jans payments be if she elects option #1? What Is the Total Cost of the loan? b) What would Jans payments be if she elects option #2? What Is the Total Cost of the loan? c) Which option she should go for? 2. (10 points) Sarah is considering investing in a new project for her software development company. The initial costof the software they are developing is $8,000. She expects the following cash flows for the next five years at the end of each year: Year 1: $3,000 Year 2: $2,500 Year 3: $3,200 Assume the software can be sold for $1,000 at the end of year 3 and Davids required rate of return is 8%. a) Calculate the Net Present Value (NPV) of the project and advise her on whether she should proceed with the investment. b) What is the Present value of all the benefits? 3. (10 points) Sarah is considering investing in a new project for her software development company. The initial cost of the software they are developing is $8,000. She expects the following cash flows for the next five years at the end of each year: Year 1: $3,000 Year 2: $2,500 Year 3: $3,200 Assume the software can be sold for $1,000 at the end of year 3 and Davids required rate of return is 11%. a) Calculate the Net Present Value (NPV) of the project and advise her on whether she should proceed with the investment. b) What is the Present value of all the benefits? 4. (15 points) You bought a house for $425,000. You made a down payment of 20% and financed the balance over 30 years at 3.5% annual interest. a) How much will your monthly payments be? b) How much principal and interest will you pay on the first year assuming your first payment is due on January 1? c) How much principal and interest will you pay on the 24th month?