Chapter 8 | Question 5: Please answer the questions below (see image and empty boxes in the images)! Thank you!:

You are trying to decide between two mobile phone carriers. Carrier A requires you to pay

$205

for the phone and then monthly charges of

$56

for

24

months. Carrier B wants you to pay

$115 for the phone and monthly charges of $74 for12 months. Assume you will keep replacing the phone after your contract expires. Your cost of capital is 3.8%.

Based on cost alone, which carrier should you choose?

You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $205 for the phone and then monthly charges of $56 for 24 months. Carrier B wants you to pay $115 for the phone ans monthly charges of $74 for 12 months. Assume you will keep replacing the phone after your contract expires. Your cost of capital is 3.8%. Based on cost alone, which carrier should you choose? Based on cost alone, you will choose (Select from the drop-down menu.)