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3a) You are considering whether to buy or lease a car. If you buy the car it is 30,000 dollars up front and will last

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3a) You are considering whether to buy or lease a car. If you buy the car it is 30,000 dollars up front and will last 6 years. You will have annual maintenance costs of 800 each of the first 3 years and 1200 per year for years 4,5 , and 6 . You can trade the car in at the end of 6 years for 4000 dollars. Assume the weighted average cost of capital is 8% interest. Calculate NPV for the purchase option. 3b) If you lease the car, you will enter into a 6-year lease, and make a down payment of 2500 dollars. The lease payment will be once per year, at an annual lease price of 5500 dollars. Maintenance and repairs are included in the lease payment. At the end of the 6 years, you return the car to the dealership. Calculate NPV for the lease option, assuming the market rate of interest is 8%

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