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iz was offered two options for a car she was purchasing: Lease option: Pay lease amounts of $350 at the beginning of every month for

iz was offered two options for a car she was purchasing:

  • Lease option:Pay lease amounts of $350 at the beginning of every month for 4 years. At the the end of 4 years, purchase the car for $14,500.

Buy option:Purchase the car immediately for $21,500.

The money is worth 5.00% compounded monthly.

a.What is the Discounted Cash Flow (DCF) for the lease option?

b.Which is the better option?

Lease Option

Buy Option

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