Best They www.hy hey were there was as the www) Cheech hal ini Why Borrow or pay cash for an asset Personal Finance Problem Bev and John Cox are set to move into their first apartment. They visited Northerly Furniture looking for a dining toom table and buttet Dining room sets are typically one of the more expensive home furnishing items, and the store offers financing arrangements to customers Bev and John The dining room set costs 515 500 and Northerly Furniture offers a financing plan that would allow them to either (4) put 18% down and finance the balance at 45% annual interest over 48 months or 2) receive an immediate $350 cash rebate, thereby paying only 515 150 cash to buy the furniture Bev and John currently earn 19 annual interest on their Savings a. Calculate the cash down payment for the loan b. Calculate the monthly payment on the financed amount (Hint Treat the current loan as an annuity and solve for the monthly payment) e Calculate the initial cash outlay under the cash purchase option. Do not forget to reduce the cash price by the cash down payment forgone on the loan (pasta) d. Assume that they can earn a simple interest rate of 1 on savings what wil Bev and John give up opportunity cost over the years they pay cash? e. What is the cost of the cash alternative at the end of 4 year? 1. Should Be and John choose the financing or the cash alternative? . The cash down payment is Round to the nearest cent) b. The monthly payment is found to the nearest cent) c. The incremental del cash outlay under the cash ahematves Round to the nearest cont) 4. Given that they can earn to save the amount Dev and date where we (opportunity cool over the years they pay cash in Rand to the newest com . The cost of the cash be end of years is Rond to the new cont) the cost of the trading strative at the end of 4 years 3 Round there No Contenitivement Manam