2. Elaine wants to buy a new Ford Truck. She sees the following ad: 2019 Ford F-150 Lariat Truck EcoBoost V6 Engine 0% APR for 66 mos. Ford Credit Financing OR $10,000 Cash Back (a) She has negotiated a sales price of $46,585 and she has a $15,000 down payment. She is eligible for the full $10,000 cash rebate. Her bank has pre-approved her for a 72-month car loan at 3.24%. Assuming Elaine wants the cheapest overall price, which option should she take? Should she take the 0% financing offer for 66 months from the dealer, or should she borrow the money from her bank at 3.24% to pay off the dealer and receive the $10,000 cash rebate? Bank Option Dealer Option N N I/Y I/Y PV PV PMT PMT FV FV Answer and Explanation (b) Now suppose she is only able to get $1,000 cash back (with the 3.24% financing from her bank). Does this change her decision? N Answer and Explanation: I/Y PV PMT FV (c) Suppose Elaine is able to arrange financing for 8.69% instead of 3.24%. The cash rebate remains at $10,000. Does this change her decision? N Answer and Explanation: I/Y PV PMT FV